self employed mileage allowance

farrier

Hi i heard martin talk about a system where you can claim 60p a mile for 10000 miles followed by 25p a mile thereafter, but you can claim nothing else ie car tax ,serviceing, insurance. I came in at the end of the article on radio 2 and am not sure if this applies to me, i am a sole trader, my vehicle is on purchase lease £250 a month,i do 20000 miles a year and am not vat registered i worked out i would be about 3000 a year better off on this scheme ..am i right? vehicle costs last year excluding the £250 a month lease were £3500
Any advice would be great

James123_2

Hi there
I was self-employed for 12 years and ran my vehicle on the basis you suggest. As mine was an old car this was far more to my advantage than the usual formula of writing-down the value of the car each year. As such, it 'paid' me in effect to run the old diesel! My understanding is that you can't swap between the two systems unless you change your vehicle. So, if you're already claiming for a lease then you it's a no-go. However, this might have changed in the 18 months that I haven't been self-employed. I don't know the exact per mile allowance, but it used to be 25p and 40p - with the higher rate for the first x amount of mileage (I think it was 4000).
A quick chat with your tax office or, indeed, a quick google should throw up this answer to this one!
Good Luck

Treading_Water

Hi there
The actual figures are 40p up to 10,000 miles and 25p thereafter. Not sure about changing from lease, but I would imagine it would be Ok if you were starting a new tax company year. Somebody else may be able to clarify that one.
In most cases the 40p then 25p works out the better option.
TW

fengirl_2

If the 20,000 miles are all business miles, both methods give an equal result.
10,000 miles @ 40p pm = £4000
10,000 miles @ 25p pm = £2500
Total £6500

Costs you have quoted are:
Running costs £3500
Lease payments £3000

Think carefully before you convert to the mileage rate method as you cannot change again (unless you become VAT registered).

farrier

Thanks that clears that up!

vernall

hi,sorry to jump into this thread but wondering about something.....i have been self employed for over 15 years,drive approx 25000 miles a year and own my own car......
would i benefit from changing to the mileage allowance?

i pressume this means you dont claim against fuel etc anymore and the mileage is ALL you claim carwise?

would there still be an allowance for when i change vehicles?

Caroline73_2

It's not claiming mileage as such - more an allowance based on your mileage so you cannot claim for anything else, even when you change vehicles.

I'll let someone else do the maths on which is better value!