Our expert Gary answered...
Yes you would need to be self employed to claim the lease rentals against tax.
If you are paid a car allowance and are employed, this will be treated as normal salary for Tax and NI purposes.
If you are employed, the current tax free limits for mileage reimbursement under the AMAP (Authorised Mileage Allowance Payment) scheme are 45PPM and 25PPM. If you are paid at a lower rate than these, yes you can claim the difference against your taxable income. For example, if you do 10,000 miles and are paid 25PPM, your are 20PPP X 10,000 under the limit. This equates to ?2,000 which you can offset against your salary. So in other words you don't pay tax on ?2,000 of salary in addition to your personal allowance (currently ?8,105).
Finally, if you are self employed and are paid either a car allowance or mileage (or both), this is treated as normal business income in addition to whatever you charge for doing the job/s. Then you can either run the vehicle in your 'self employed' name, or run it personally and the business can pay you a mileage allowance for all business miles.
Hope that helps.
Andy