Car Tax Help

dexim

Hi,
I was fully self employed prior to obtaining a full time job. I now do the self employed bit on a part time basis. Having a spot check on one of the tax years, before they look into the rest, C&E have told me that I can only claim for business miles at 40p which covers all running costs, depreciation etc. This I find strange when I have never claimed for a car this way before
As the running costs far exceed the 40p x miles can I not claim the business % of say 50% of all the costs and waive the 40p.
If I am able to do this do I also presume that I would be liable for additional personal tax but overall would this be beneficial?
Thx
D

Proper_Shropper

The 40p per mile rate is low I agree and thats only up to 10,000 miles at which point it drops to 25p (thats the top end) some companies set it lower than that! If you are self employed however I woud have thought that you can offset the depreciation against tax returns in additon to the 40p although I would check it out! HM Rev and Customs web site will have the detail on this for you. Basically the gov dont want people in their cars so I cant see this rate bettering to anything significant any time soon.

mtem74

as self employed I'd reckon you could claim the 40/25p or claim actuals. but for the actuals you'd have to have all costs and show the proportion in relation to the self employement. If you have good mileage records this should be easy

Elaine_Wilson

There is probably a communication error here somewhere.

In your self employment the correct method is to claim the relevant proportion of the actual costs incurred during the year. The proportion used should be backed up with robust mileage records. As a concession HMRC will allow the 40p/25p rates to be used if your turnover is below the VAT registration limits.

If you claim as an employee then you can only use the fixed rates.