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Where Taxpayers and Advisers Meet

Self Employed Mileage Allowance

Joined:Mon Jan 02, 2017 10:47 am
Self Employed Mileage Allowance

Postby GasEngineer » Sat Mar 23, 2024 4:14 pm

Self employed plumber.
I recently sold my van and am now using my private car for work.
I understand that I can claim 45p per mile for eligible business journeys.

But I am struggling with understanding how to claim for mileage so would appreciate some guidance.

As I see it - if I claim say 2222 miles at 45p = £1000 as an expense on my tax return, that will reduce my taxable income by £1000 and hence reduce tax payable by £200 at 20% tax.

This seems as if I am netting £200 for the 2222 miles so I'm only getting 9p per mile for using the car.

Have I totally misunderstood?

Joined:Fri Dec 08, 2023 1:31 am

Re: Self Employed Mileage Allowance

Postby Benthal » Sun Mar 24, 2024 1:57 pm

if you are a higher tax payer, then it saves double what you calculated.

eligible amount need to be multiplied by relevant tax rate.

Joined:Sat Feb 01, 2014 3:26 pm

Re: Self Employed Mileage Allowance

Postby bd6759 » Sun Mar 24, 2024 3:00 pm

Yes you have misunderstood.

The government is not going to pay your expenses for you. What they do is give you tax relief on the expenses you do incur.

Put it this way: you buy a length of pipe for £10. That is an expense which reduces your profit by £10. You pay tax on £10 less income. That saves you £2?

The cost of your expenses is paid by your customers. It is built in to the rates you charge.

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