Purely on the running costs of her car, she has two options:
1. To carry on doing the 40p per business mile or,
2. To take a relevant proportion (dependant on the business mileage to the total mileage in the year) of all the running costs of the car, insurance, servicing, road tax, repairs, fuel etc together with the same proportion of capital allowances (the tax equivalent of depreciation).
The same calculation for the allowable proportion of the lease car costs would be the same as option 2 above.
I would be reluctant to switch methods mid way through her accounting period though.
I am also assuming that she is not VAT registered.
I hope this helps
A Wade Tax Consultancy