Self-Employed - Claiming Business Mileage?

buchloe

Hi everyone,

After recently being made redundant from my job I've decided to go self-employed full-time. I'd previously registered with HMRC as self-employed on a part-time basis and I'm currently using my private car for my business, keeping a mileage log for all business miles travelled, logging dates, start/end locations and mileage covered in a seperate spreadsheet to my cashbook. Is this correct, or should the mileage be entered in the cashbook instead?

When it comes to self assessment at the end of the tax year, is the mileage covered (at 40p per mile for first 10,000 miles and 25p thereafter) entered as an expense in addition to the rest of my expenses (I expect to earn less than £15,000 this year so it is not broken down into seperate items of expenditure), or is it a seperate claim/sheet?

I've read in another thread about form P87 for claiming business mileage - is this applicable in my situation or is it just for company employees to claim the difference back between the 40p and what their employer actually pays them per mile to use their cars for business use?

Sorry for all the questions!

PasturesNew

Not sure on the first question as I do my accounts myself and don't use formal terms.

Yes, 40p/25p. Yes it is an expense.

I don't know of P87, but I expect this doesn't apply to you and you're right about it being for employees. Simply tot up your business mileage for the year, apply 40p/25p and then enter it as a simple business expense.

Merlin_Accounts

Hi

You are doing it correctly, and refreshing to hear of someone that really is keeping a mileage record. As you correctly say, just work out the claim using the 40p/25p rates and add it to the rest of your expenses when you fill in your tax return.

Dont forget that you can still claim for parking charges (not fines), costs of cleaning the car, and a proportion of any interest you are paying on the car if on finance. Mileage is reimbursing the fuel, maintenance, road tax and wear & tear of the vehicle.

Of course you may want to check whether you would be better claiming based on actual costs and making a capital allowance claim for the car (all depends on whether the business miles represents a very high proprtion of total miles, and also whether you are doing a lot of business miles).

Hope that makes sense.

buchloe

thanks for all your input guys, i appreciate it :beer:

poochunks

as the title says if i lease a van can i claim that on top of the 40p per mile??

Merlin_Accounts

poochunks wrote: »

as the title says if i lease a van can i claim that on top of the 40p per mile??

Sorry, you cant have it both ways - if you claim for the lease costs you are claiming in part for the cost & wear & tear of the vehicle - thats what the lease premiums cover (as a rule). The 40p/25p rate is meant to compensate for this, as well as fuel and maintenance.

If you are leasing, and the vehicle is used 100% for the business, I doubt that you would be better off opting for the mileage method. If you are VAT registered you cant use the mileage method anyway, but can claim the VAT back on the lease costs (or 50% if its a car).

You would be better off talking to your accountant and letting him do a comparision for you, to see which method is best.

skyjumper

may be a very silly question.

if I were to use my personal car and claim back 40/25 rate, and it was given for service, and I need a car for getting to places for purely bussiness purposes, Is it possible to rent a car and claim the bill of that as company expenses.
thanks in advance

Merlin_Accounts

Hi Skyjumper

If the facts are as you state them, that the hire car would not be used for personal purposes, then yes, you could claim the whole of the hire charges and running costs (but surely we'd only be talking about a couple of days?). What you have to think about though is that you are having to spend money on a hire car - why not find somewhere that offers courtesy cars to its customers, or better still plan your work schedule so that the servicing doesn't interfere with your work (good time to catch up on writing your books up for the year end accounts!!).

featherstick

Apologies for the thread resurrection.

With regard to a mileage log, is it sufficient to record the relevant mileage per day or should there be some reference to the mileage on the clock of the car at the time?

featherstick

I ask this in relation to the 40p per mile claim method

fengirl_2

Its fine to record business miles per day.