help with p87 mileage (2025)

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hannah29_2 Posts: 177 Forumite

25 June 2011 at 12:05PM in Cutting tax

Hi
we have being given mixed advice from the tax office for the last 3 months so need some help.
Hubby was working full time permanent on a job and came out of that on 7th april this year. (p45 proof) he filled in his p87 to claim for mileage for 2010/2011, all fine. phoned the tax office to chase it, no problem its being reviewed.
Hubby has set up a limited company on the 5th april this year to go self employed, although he did not work as self employed till mid april. they have sent him a self assessment tax letter.
called the tax office on thursday this week re the p87 and was told no problem it will be with you by the beginning of july. On the same day a letter was sent to us from them saying it cannot be paid and we must fill in the self assessment to get it back. this could take months and was the outstanding balance on our summer holiday.
he was not self employed on the 5th april although the company was set up then in preparation to go self employed and as stated he didnt come out of full time work till the 7th april.
any advice????

BoGoF Posts: 7,099 Forumite

25 June 2011 at 6:56PM

First of all you are not self employed if you are a director of a limited company.
With regards the tax return, if HMRC's records show that the directorship started on 5 April 2011 then I'm afraid the tax return will need to be completed.
I'm not sure why you think it would 'take months'. In fact if he were to register for online filing he could have any repayment in a couple of weeks.

See Also
P87 form - what to claim Self assessment vs P87
hannah29_2 Posts: 177 Forumite

25 June 2011 at 7:08PM

thanks bogof, i suppose i just assumed any repayment of tax when they owe you usually takes ages!!! will get the return filled in online. am just a little annoyed that it has taken the tax office 3 months to inform us we need to get this by filling in a tax return and all along have said the p87 is fine and being processed!
jimmo Posts: 2,285 Forumite

25 June 2011 at 9:36PM

There are 2 potential reasons why HMRC require a Self Assessment Return for 2010/11.
The first is that the expenses he claimed on the form P87 were more than £2,500.
However both your hubby and HMRC should have realised that the form was inappropriate long before now.
The second is because his directorship commenced on 5 April 2011 and so existed in the tax year.
Despite the fact that he had no earnings from the directorship in 2010/11 I would suggest that when he completes his Return on-line, he should complete 2 separate Employment Pages, one for his former job, the other for his directorship declaring nil income.
I know that may sound daft but computer type logic is that the directorship existed in the Tax Year. Declaring the source of income and nil income is probably the safer option. If the source of income that triggered the requirement for a Return is not declared that is likely to trigger alarm bells at HMRC.
Also it is rather important that your hubby's limited company has already set up a PAYE scheme and has a PAYE reference. Your hubby will need to include that reference in his Return.
TheDivineMrsJones Posts: 1 Newbie

12 August 2011 at 11:38AM

Hello there,:hello:
I am new to this game..so bear with me. The P87 form..and the story I was told.
I was told by a very nice lady from the tax office on the telephone, back in June, that I would be entitled to the difference between what my employer paid in fuel expenses and what the government recommends. In my case £438.00.
I telephoned today to chase it up, because I have heard nothing..only to be told that I would get a cheque for £87.00
I then argued with the chap on the phone about it and he said it was because it was the taxable difference.."How can that be?" I wailed.."I thought it wasn't taxable? On my payslip it is shown as a separate item, and the only tax I pay is on what I have earned" He went on to say that it was..so I argued that I am now paying tax twice on fuel..once at the pump and now, through this claim apparently. I didn't win..you never do..but he left asking if there was anything else he could help with...Hummm...
What I am driving at here is..Why wasn't I told that in the beginning? I was led to believe that I would be paid the difference..£438..The tax office need to be clearer when they talk to you about the P87...
So, when you apply for this, or speak to the tax office on the phone..ask them to be very clear as to what you are entitled to..or you could get a shock..I did.
Tarasam Posts: 508 Forumite

12 August 2011 at 1:16PM

I'm sorry you've had conflicting advice from the helpline (this is common and should be picked up during the 3 !?! (yes thats all) calls we have chosen each month for quality checking) ....
BUT the form you had was called "P87 - tax relief for expenses of employment", all the way through the form it talks of tax relief, at no point does it mention that you would get back the difference between your employer payment and the government advised amount.
http://www.hmrc.gov.uk/forms/p87.pdf
To be fair though, the form could and should be clearer.
The amount coming back to you is correct unfortunately.
BoGoF Posts: 7,099 Forumite

12 August 2011 at 7:17PM

First of all, any need for the extra large font....
Second of all, do you seriously expect HMRC to pay the running costs of your car. Your beef should be with your employer for not paying what they could