Hi – perhaps a question for the accountants and income tax specialists?

I normally submit an annual tax return to fine-tune things after my normal employers PAYE deductions. As part of that I have allowable ‘Employment Expenses’ for business mileage, not massive but a few grand per year.

The issue is that as a result of ill health my business mileage has plummeted over the last six months – which is likely to mean that when my 2013/14 tax return is due I will owe HMRC a fair bit of cash.

To compound the issue I am actually driving just as much as before and my fuel costs are continuing to rise – so far approx. 1200 miles over a month due to a 60mile round trip to hospital each day.

Can this be recovered or accounted for in some way?

You can claim your business mileage at the approved rates. Commuting and trips to the hospital don’t count. I assume you’ve had a higher tax code throughout the year and paid less tax than you should have based on the previous year claim. You could have contacted HMRC to reduce your tax code knowing your expenses would not be as high otherwise get saving as you have until January 2015 to pay the tax.

Is your business mileage not simply reimbursed by your employer?

If not, presumably you get a refund from your self assessment? Is that is the case then you will just get back less for 13/14 rather than owing some to Hmrc. Unless you have some adjustment to your tax code (check the notice from HMRC to see if there is mention of this), in which case you may owe some cash.

Pretty sure the hospital mileage can’t be set against income I’m afraid as it won’t count as business mileage, so Hmrc won’t be interested.

Sorry that you are unwell, must be tough for it to hit in the pocket too. Might be worth asking any charities/support organisations related to your condition if they are aware of any schemes that offer financial support.

NHS does offer some help, but it is means tested:
http://www.nhs.uk/nhsengland/Healthcosts/pages/Travelcosts.aspx

My company pays only a fraction of actual cost of business mileage (16p per mile vs the allowable 45p per mile) so tax relief is due on the difference.

I knew it was a long shot re some form of HMRC allowance for costs to travel for hospital (radiotherapy)treatment – just a bit of a tw@ that there’ll be a financial double-whammy as a consequence.

are you rerouting business trips so that you can visit the hospital as an incidental part of work related travel, eg. is the travel home>client>hospital>home or is it home>client>hospital>another client>home?

Nope, Ninfan.

Working now limited to just working from home in the mornings and travelling to the hospital each afternoon. No more customer / business meetings now for a while.

The business mileage bit may be a red-herring – just the effect of my work mileage dropping off which will lead to me owing HMRC while my outgoings for fuel are just as high as ever unfortunately.

ah, was worth checking.

I don’t see how you would end up owing HMRC money though – if you’re PAYE then surely the deductions will have already been made from salary, you just can’t claim back as much with your SA or P87?

(I hope you’re coping well BTW?)

I see what you mean, but no, my employer pays just a proportion of the mileage and encourages you to claim the balance from HMRC. HMRC payed this as a lump sum for a few years and then adjusted my tax relief to effectively make the value come through month-on-month. Because my mileage has dropped, the tax relief will have been too high, so I will owe them (HMRC) money at year end.

would that adjustment not be for the previous years milage though?

ie. rather than give you a lump sum when they receive your completed year milage figures, they adjust your future taxable allowance so it ‘drip feeds’ – so the tax relief you’re receiving now is for miles you’ve actually already driven in the last fiscal and claimed for in your last tax return, not an estimate of miles you had expected to do in this tax year (and now won’t)?