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Where Taxpayers and Advisers Meet

Car allowances self-employed

emilyhmere
Posts:19
Joined:Wed Aug 06, 2008 3:14 pm

Postby emilyhmere » Mon Aug 22, 2005 5:10 am

Hi
Can someone please clarify what allowances I can claim for using my car for business purposes. Can I claim fuel, servicing, insurance, road tax etc (or a proportion of as car is also for personal use)?
Thx

deanshepherd
Posts:1019
Joined:Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Mon Aug 22, 2005 5:41 am

Hi Emily

Basically you have two options:

1) Claim all motor expenses (petrol, repairs, insurance, mot, tax, loan interest, servicing etc.) and then deduct a proportion for private use based on a log of your business/private mileage.

2) Use the Inland Revenue mileage allowance of 40p per business mile (for the first 10,000 business miles) and 25p thereafter.

Which of the above works best for you will depend on your particularly circumstances. Option 2 usually works better for high mileage in cheaper cars, and option 1 for lower mileage in more expensive cars.


Dean Shepherd
dean.shepherd@mmi-online.co.uk
MMI Accountancy
www.mmi-online.co.uk

emilyhmere
Posts:19
Joined:Wed Aug 06, 2008 3:14 pm

Postby emilyhmere » Mon Aug 22, 2005 8:33 am

Thanks for your help Dean. Am I allowed to decide at the end of each tax year which one is most beneficial to me or if I chose one do I have to stick with that option?

deanshepherd
Posts:1019
Joined:Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Mon Aug 22, 2005 8:49 am

You have to stick with the option you choose whilst you have the same vehicle. You can wait until the end of your first accounting period before deciding though.


Dean Shepherd
dean.shepherd@mmi-online.co.uk
MMI Accountancy
www.mmi-online.co.uk

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Postby King_Maker » Mon Aug 22, 2005 11:01 am

"2) Use the Inland Revenue mileage allowance of 40p per business mile (for the first 10,000 business miles) and 25p thereafter." - deanshepherd

Loan interest can also be claimed when using the mileage option.

However, the mileage option is restricted to those businesses whose turnover is below the VAT Registration threshold.

nin73
Posts:1
Joined:Wed Aug 06, 2008 3:28 pm

Postby nin73 » Wed Aug 24, 2005 3:08 am

Hi,

Not sure if this question is just geared towards Self Employed personnel. I am employed full time by a company. I claim 40p per mile for 10,000 miles then 25p there after. I cover 25,000 miles a year so the car has to be serviced often and also tyres changed. I bought the car through a loan and would love to claim the interest back. I have heard that some people are claiming a car allowance as it is their car and get servicing, etc paid for as well as their mileage. Does any body know what exactly i can claim for????? Many thanks in advance.

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Postby King_Maker » Wed Aug 24, 2005 3:29 am

nin73,

Unfortunately, employees can only claim the IR approved mileage rates (on a tax free basis), which covers *ALL* expenses (including servicing, car finance etc).

Ideasweb
Posts:1
Joined:Wed Aug 06, 2008 3:57 pm

Postby Ideasweb » Wed Aug 08, 2007 5:53 am

Hi all,

Quick few questions.

I run a small web design company and use my car to meet clients, travel to conventions etc, can I:

1. Claim for fuel
2. Claim for road tax
3. Claim for insurance

I also use my car for private use. I would say that I use my car for at least 5000 miles business and 10-15000 personal.

If you could let me know, plus let me know of any forms, DVLA HM IR, that I'll have to fill out.

Thank you

Alastair

deanshepherd
Posts:1019
Joined:Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Wed Aug 08, 2007 6:35 am

All your questions have already been answered on this thread.

There are no forms required to notify anyone.

Jonesy6113
Posts:6
Joined:Wed Aug 06, 2008 3:59 pm

Postby Jonesy6113 » Tue Sep 18, 2007 5:09 am

Alistair,I dont think that you can claim for road tax or vehicle insurance.

With regard to claiming the Inland Revenues Milage allowance would someone kindly clarify my positon, should I use this scheme when filing my self assessment.

I am VAT reg - but my turnover is below the current threshold.

I am a self-employed courier - last year,2006 I drove approximately 80,000 miles all on business.

Can I claim ALL of this back using their scheme for 40p per mile for the fisrt 10,000 and 25p per mile thereafter?

Many thanks.


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