Can I Claim Car Expenses?

claudiac_2

Hoping someone can answer this question. My OH and son are both self employed (CIS), neither can drive. I drive them regularly to and from jobs, using my own car. I wondered if the car would have to be registered in one of their names to allow an expenses claim?
I am looking to reduce the tax bill for all of us as I think the tax burden on the self employed is ridiculous, so any way of using the system for our own benefit is a good thing. Can anyone advise me please.

Thanks

fengirl_2

The car would not have to be registered in their names, but they would have to actually pay you for driving them in order to claim a deduction in their accounts. They could pay you 40p pm for the first 10,000 miles and 25p pm thereafter which would be fully tax deductable.

claudiac_2

Hi Fengirl,

Sorry didn't get back last night, but sometimes life takes over!
Thanks for your advice. I did think it would be okay, but wanted to check. Most of the money I spend on petrol is for driving them around. Do you think I need to keep a driving log or would my petrol receipts be enough?

Claudiac

fengirl_2

If you are claiming by pence per mile, you don't need to keep receipts, but you do need to keep a log of business miles. I would also suggest that you submit a formal claim for your mileage to your OH and son, say, monthly, and that they actually raise a cheque to pay you that amount. (Much as you would if you were climing expenses from your employer.) That will give you a full audit trail if they are ever investigated.

ceeforcat

Sorry – cannot say that I like this. Would opening poster not have to declare this extra income and claim any associated expenditure? Just seems that there is a lot of hassle for little savings here.

Andy_L

Whats the insurance situation?. As you're not an employee of the company you might need the more expensive "Private Hire" insurance rather than "Business use".

Eric_Pisch

Andy_L wrote: »

Whats the insurance situation?. As you're not an employee of the company you might need the more expensive "Private Hire" insurance rather than "Business use".

You would defiantly need to check the insurance, many policies are void if the driver accepts money

fengirl_2

There is no tax charge on the poster as the amounts she is going to be paid are within HMRC's limits, below which there is no liability - either for an employee, or a volunteer (which is essentially what she is).

claudiac_2

Having read all the replies I am confused! Basically I take them to and from work, which I will continue to do regardless of the tax implications, but the idea was to reduce tax liability for my OH and son, as they do not claim back in expenses the costs which they pay ie petrol. When we go to the garage one of them puts in the petrol and pays for it, so is that not a legitimate expense? My insurance includes for business use as I travel between different premises, but surely I don't need private hire? Sorry if I sound a bit dim! Thanks

lisyloo

My insurance includes for business use as I travel between different premises, but surely I don't need private hire?

In the method suggested you are not using it for your own business use.
You are being a taxi for someome else.

My advice is DON'T make any assumptions or take any chances with your insurance.
Check with your broker/insurer or read your policy booklet.

Some policies have provisions for money being handed over where it's just covering costs but you MUST check as you cannot risk driving uninsured.

They might be able to put in expenses for petrol, but 40p per mile generally covers ALL the costs e.g. depreciation, repairs, servicing and petrol, so may eb more generous.

fengirl_2

Go back to my original post.
The idea is that they would pay you 40p pm for the first 10,000 miles you drive them and 25p pm thereafter. This is not taxable on you as these are the limits which HMRC allows as non-taxable. The amount they pay you is included in their accounts and this reduces their tax liability at the end of the year.
As I said, make sure you make claims to them in writing so that this deduction in their accounts is backed up by paperwork - it's as simple as that.