Claiming mileage charge over 40p per mile
nigreeves
Posts: 131 Forumite
in Cutting tax
My wife recently went self employed.
I understand she can claim 40p per mile for using her car.
Petrol prices have increased considerably.
Is there any way she can claim more than 40p per mile to reflect the inflationary uplift in petrol charges
I understand she can claim 40p per mile for using her car.
Petrol prices have increased considerably.
Is there any way she can claim more than 40p per mile to reflect the inflationary uplift in petrol charges
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Comments
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She cannot claim anything, but what she can do is to include a deduction in her accounts for the use of her car.
If she is not VAT registered, she can include 40p permile for the first 10,000 miles and 25p per mile thereafter.
Alternatively, she can include in her accounts the full costs of running the car - fuel, oil, repairss, insurance, tax, etc etc. Then when she does her tax return, she would need to add back the proportion of the car running costs relating to private use. Its therefore important that she keeps a record of all private mileage.
If this method is chosen for car running costs, she will also claim capital allowances on her tax return, whihc is a method of allowing for depreciation of the vehicle.£705,000 raised by client groups in the past 18 mths :beer:0 -
My wife recently went self employed.
I understand she can claim 40p per mile for using her car.
Petrol prices have increased considerably.
Is there any way she can claim more than 40p per mile to reflect the inflationary uplift in petrol charges
Are you having a laugh? You dont think 40ppm is reasonable already?
500 miles would get you back 500x0.4 = £200.
Now does it cost £200 to fill your wifes tank? Does it cost half of this? Does it even cost a 1/4 of this?
See what im getting at. Even if petrol/diesel went upto £2-£2.50 p/l you would still be considerably better off.
No pleasing some people:rolleyes:0 -
Are you having a laugh? You dont think 40ppm is reasonable already?
500 miles would get you back 500x0.4 = £200.
Now does it cost £200 to fill your wifes tank? Does it cost half of this? Does it even cost a 1/4 of this?
I saw your smiley and assume this was tongue in cheek but it made me consider my own position.
A tankful of petrol costs me over £50 and I get a bit over 300 miles from this so I reckon that's about 18p per mile.
Tax, insurance and MOT come to 9p.
Ideally, I would like to keep this car for 11 years (or more), giving me a depreciation charge of £500 per year, or 7p per mile.
This leaves about 6p per mile to cover servicing, tyres, etc.
Blimey, I hadn't realised how tight the 40p figure is.If it’s not important to you, don’t consume it0 -
Well a tankful of diesel costs me £50 and i get 600 miles from this.
That works out at 8.3p per mile
Unless your car is purely for business use, which 99% of the time it is not, then you have to accept insurance, tax, depreciation and servicings just like everyone else.
Claiming 40p for something that costs me 8.3p, i certainly would not be whinging. Yes wear and tear, insurance, servicings, etc but this needs to be split for personal/business use.
You gain financially from the 40p rule, dont kid yourself that you do not.0 -
Well a tankful of diesel costs me £50 and i get 600 miles from this.
That works out at 8.3p per mile
Unless your car is purely for business use, which 99% of the time it is not, then you have to accept insurance, tax, depreciation and servicings just like everyone else.
Claiming 40p for something that costs me 8.3p, i certainly would not be whinging. Yes wear and tear, insurance, servicings, etc but this needs to be split for personal/business use.
You gain financially from the 40p rule, dont kid yourself that you do not.
I presume by the tone of your responses that you don't do much driving for work purposes?0 -
I presume by the tone of your responses that you don't do much driving for work purposes?
i was thinking the same! the OP is correct with the current rises in fuel and now car tax, 40p is very close to the mark for some circumstances! My car isn't particularly economical (the greenies will kill me) costing 24p per mile just in fuel!
saying insurance etc has to be paid anyway is wrong, insurance, servcing, tyres, etc all cost more the more business use you do, so has to be factored into the 40p... the extra business miles also increase depreciation, compounding the problem!
this rate hasn't changed since about 2001 IIRC i'm sure everyone will agree the costs of motoring has risen considerably since then! its just another way of HMRC cashing in on the sly
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She can pay herself whatever she likes per mile, but anything over the 40p a mile for the 1st 10K and 25p per mile after that will have to be declared on a P11D, and would be taxed.
If she wants to cover the rising prices of fuel, she needs to calculate this in when doing her quotes.0 -
Are you having a laugh? You dont think 40ppm is reasonable already?
500 miles would get you back 500x0.4 = £200.
Now does it cost £200 to fill your wifes tank? Does it cost half of this? Does it even cost a 1/4 of this?
See what im getting at. Even if petrol/diesel went upto £2-£2.50 p/l you would still be considerably better off.
No pleasing some people:rolleyes:
Actually as stated in a subsequent post you don't 'get back' 40p per mile, but you are allowed to deduct business mileage at 40p per mile for the 10,000 miles and subsequent miles @ 25p per mile as a business expense. That means you 'get back' 40p x 20% = 8p per mile if you are a basic rate tax payer or 40p x 40% =16p per mile if you are a higher rate taxpayer.
If you calculate the current cost of running a car including all costs over 10,000 miles per year you will find 40p/mile barely covers costs for an ordinary car.
See this link for the AA calculation for a petrol car
http://www.theaa.com/allaboutcars/advice/advice_rcosts_petrol_table.jsp
Or Diesel
http://www.theaa.com/allaboutcars/advice/advice_rcosts_diesel_table.jsp
Of course if you are employed and your employer pays 40p per mile (if you are lucky!!) for business use of your own car the you get the whole 40p/mile tax free!!0 -
From the original post she is going self-employed so I would say DKLS's reply is n/a as she is not an employee, unless she goes ltd.
As a self-employed person she can either claim the actual running costs of her car for business purposes ie capital allowances, servicing, fuel costs etc - obviously apportioned to business use OR she can use the approved mileage rates mentioned. However once a particular method has been adopted then you have to stick with that, you cannot chop and change to whatever is to your advantage each year.0 -
i was thinking the same! the OP is correct with the current rises in fuel and now car tax, 40p is very close to the mark for some circumstances! My car isn't particularly economical (the greenies will kill me) costing 24p per mile just in fuel!
saying insurance etc has to be paid anyway is wrong, insurance, servcing, tyres, etc all cost more the more business use you do, so has to be factored into the 40p... the extra business miles also increase depreciation, compounding the problem!
this rate hasn't changed since about 2001 IIRC i'm sure everyone will agree the costs of motoring has risen considerably since then! its just another way of HMRC cashing in on the sly
The HMRC isn't 'cashing in'. They're not paying you your business mileage for you are they? If it costs more than 40p per mile to run your business then that's your own problem.0
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