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Mileage allowance for self employed
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# 1
mancitychick
Old 15-03-2007, 7:58 PM
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Question Mileage allowance for self employed

My husband is newly self employed. I have had a look on the HMRC website but cannot find an answer.

How does business mileage work, i.e. will he declare it under expenses (if so is they a going rate) or is there some sort of mileage allowance from HMRC that is tax deductable.

Any pointers or guidance would be appreciated.

Thanks.
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# 2
WHA
Old 15-03-2007, 8:09 PM
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Quote:
Originally Posted by mancitychick View Post
My husband is newly self employed. I have had a look on the HMRC website but cannot find an answer.

How does business mileage work, i.e. will he declare it under expenses (if so is they a going rate) or is there some sort of mileage allowance from HMRC that is tax deductable.

Any pointers or guidance would be appreciated.

Thanks.
Assuming he is a sole trader and not a limited company, he needs to work out the "business" mileage proportion and claim that proportion of his costs. So if he drives 10,000 miles per year, and 6,000 miles are business, then he can claim 60% of his motoring costs (fuel, road tax, insurance, repairs, etc) and 60% of capital allowances to cover the depreciation of the car (special rules apply for capital allowances - too complicated for this simple answer). An alternative if he is a small business and not VAT registered is to claim 40p per business mile (up to 10,000 business miles per year and 25p per business mile over 10,000) but then he can't claim the actual running costs nor capital allowances. Do the maths, compare both ways when you have a good idea of his business and private mileage.
I am a practising accountant but my comments on these boards are for general interest only. Proper professional advice, particular to your own personal circumstances, should be sought before you take any actions.
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# 3
mancitychick
Old 23-04-2007, 5:20 PM
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I have one more query on this subject, if someone could help me please.

Hubby is sole trader and will be claiming the pence per business mile allowance. Since going self employed in Sept 06 upto end of Mar he has done 8897 miles.

How does the 10k miles per year work, is it pro-rata over the 6 months he has been self employed or will he be able to claim the full 40p on all of the 8897 miles done this tax year?

Thanks in advance for any help given.
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Cute 'n' Quirky
Old 23-04-2007, 5:45 PM
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Of the 10K, if 60K are business use then you claim for 60%, whether the use was over 6 months or 12. The percentage of the initial amount remains the same.
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# 5
mancitychick
Old 23-04-2007, 6:01 PM
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Of the 10K, if 60K are business use then you claim for 60%, whether the use was over 6 months or 12. The percentage of the initial amount remains the same.
Sorry this has confused me

Does it mean that he can claim all 8897 business miles at the 40p rate, regardless of the fact that they were done within a 6 month period?
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dejongj
Old 23-04-2007, 7:26 PM
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Quote:
Originally Posted by mancitychick View Post
I have one more query on this subject, if someone could help me please.

Hubby is sole trader and will be claiming the pence per business mile allowance. Since going self employed in Sept 06 upto end of Mar he has done 8897 miles.

How does the 10k miles per year work, is it pro-rata over the 6 months he has been self employed or will he be able to claim the full 40p on all of the 8897 miles done this tax year?

Thanks in advance for any help given.
Yes you can claim the full 40p over the first 10k miles no matter when in the tax year they occurred...So that leaves him with a further 1103 miles he could claim at 40p before the rate is reduced to 25p...
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