With soaring petrol prices, a 10% increase in the scale used to calculate the mileage allowance was decided by the government. This decision will have an impact on the declaration of income for 2021 which will be carried out in the spring. With more or less significant effects depending on the taxpayers. Explanations.
An average tax saving of 150 euros. Here is the promise of the government which announced at the end of January the revaluation of 10% of the mileage scale. A gesture to take into account the sharp increase in fuel prices borne, in 2021, by employees who use their vehicle to carry out their professional activity, explains the executive. The effect will be quick and direct from their 2021 income tax declaration, assured Prime Minister Jean Castex.
This scale, calculated according to the power of the vehicle and the number of kilometers travelled, takes into account in particular the depreciation of the vehicle, repair and maintenance costs, fuel consumption and even insurance premiums. He is chosen today by 2.5million households who use their car for professional purposes and who choose not to use the automatic flat-rate deduction of 10% on their annual taxable income. If the latter is there to cover certain current expenses, transport in particular, employees who believe they have spent more to get to work can waive this flat-rate deduction. And therefore use the mileage scales (the main scale for cars, motorcycles and mopeds, or the specific scale for fuel costs which concerns the mixed use, personal and professional, of a car or two-wheeler ) published each year by the tax authorities to take advantage of the deduction from actual costs.
| Administrative power (in CV) | Distance (d) up to 5000 km | Distance (d) of 5001 km 20000 km | Distance (d) beyond 20000 km |
|---|---|---|---|
| 3 CV and less | dx 0.502 | (dx 0.3) + 1007 | dx 0.35 |
| 4 HP | dx 0.575 | (dx 0.323) + 1262 | dx 0.387 |
| 5 hp | dx 0.603 | (dx 0.339) + 1320 | dx 0.405 |
| 6 HP | dx 0.631 | (dx 0.355) + 1382 | dx 0.425 |
| 7 CV and more | dx 0.661 | (dx 0.374) + 1435 | dx 0.446 |
Taxes: real costs or 10% reduction, which is the best option?
The winners
One thing is certain for households that already opt for real costs, the deduction on 2021 income will be more generous. To get a more precise idea, here are 3 examples provided by the Fidroit firm.
- For a professional journey of 4000 km with a 6 HP vehicle, the amount of deductible expenses is 2,524 euros in 2021 compared to 2,296 euros in 2020, i.e. a gain of 228 euros. For a taxpayer taxable at 11%, this additional deduction provides tax savings of 25.08 euros (228 euros at 11%). It reaches 68.4 euros with a tax bracket of 30%, 93.48 euros 41% and 102.6 euros 45%.
- For a professional journey of 6000 km with a 5 HP vehicle, the amount of the corresponding costs is 3,354 euros in 2021 compared to 3,030 euros in 2020, i.e. a gain of 324 euros. The new tax saving is 35.64 euros for taxation at 11%, 97.2 euros at 30%, 132.84 at 41% and 145.8 euros at 45%.
- For a professional journey of 22,000 km with a 7 HP vehicle, the amount of the corresponding costs is 9812 euros in 2021 against 8910 euros in 2020 for a gain of 902 euros. The tax saving is therefore 99.22 euros at 11%, 270.6 euros at 30%, 369.82 euros at 41% and 405.9 euros at 45%.
In summary, we see that the deduction is higher for a taxpayer with a high marginal tax bracket and who leads a powerful vehicle. Warning, this advantage is not infinite since it does not provide for a bonus beyond 7 CV. Owners of even more powerful cars, which therefore consume more fuel, will only partly benefit from the increase in the scale. It will not fully compensate for the additional cost of fuel expenses. Indeed, the compensation is based on less powerful vehicles that consume less, explains Olivier Rozenfeld, president of Fidroit. Moreover, one should not overestimating the number of deductible kilometers. Indeed, you cannot deduct more than 80 km round trip per day between your home and your place of work, with some exceptions.
By extension, the revaluation of the kilometer scale should encourage taxpayers abandon the automatic 10% reduction to take advantage of the option of real costs for the 2021 income tax return. This is the case, for example, of employees with high incomes who until now used the 10% reduction, the maximum ceiling of which is 12,829 euros this year. A ceiling increased by 1.4% compared to that of 2020 while at the same time the kilometer scale is increased by 10%. Certain employees could thus have interest, according to the professional journeys which they carry out, to use the option of the real expenses to reduce their incomes more than what allows the abatement of 10%, explains Olivier Rozenfeld.
This is also the case for salaries which have hitherto been taxable and could benefit from the increase in this scale to become non-taxable. Take the case of an employee who in 2021 completed a professional career of 4000 km with a 6 HP vehicle. The amount of costs corresponding to the mileage scale that he can deduct is now 2,524 euros, compared to 2,296 euros in 2020, i.e. 228 euros more. If this taxpayer was hitherto just taxable on a fraction of his income, the revaluation of the mileage scale can save him from paying income tax, but these are very marginal hypotheses, says Olivier Rozenfeld.
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The risks of the mileage scale with teleworking
But how can I take advantage of the real cost option if I haven’t kept the proof of expenses of 2021 for my trips between my home and my work? If this is not specified in the employment contract, a certificate from the employer indicating that the employee uses his personal vehicle to get to work is sufficient for the tax authorities. There is therefore no specific element to keep. With the exception, however, of parking fees and pages which can be deducted in addition to the mileage scale provided that you can present the supporting documents, explains Olivier Rozenfeld.
However, this expert wonders about the risks choose the real costs option thanks to the new mileage scale due to the generalization of teleworking. This creates a new hazard. In companies where it is possible to telecommute, it will be difficult to have a precise picture of the actual movements of employees at their place of work. In theory, the company should keep a precise register that could be used by the tax authorities in the event of an audit to ascertain the reality of the mileage costs declared by an employee, underlines Olivier Rozenfeld. Partly theoretical reasoning. The reality is that the risk of control for an employee is very low. The tax administration will be more interested in taxpayers with large variations in their income and their expenses from one year to another, continues Olivier Rozenfeld.
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Losers
The revaluation of the mileage scale has been the subject of criticism such as that of the ecologist deputy Matthieu Orphelin. In his view, this system favors powerful vehicles, is intended only for working people who pay income tax, and only targets a small part of the population: only 2.5 million French people who pay tax declare real costs! Raising the scale of mileage costs is therefore a false good anti-redistributive idea which will not improve the situation of the working poor but rather that of wealthy households.
Moreover, since the kilometer scale is applicable to professional travel, its revaluation will not benefit other categories of the population such as withdrawals for example. However, the government points out that in the context of the rise in energy prices, it has implemented other measures aimed at the entire population: the tariff shield for gas and electricity, the revaluation of the energy check or even the inflation allowance of 100 euros which has just been paid to 38 million individuals.