Self Assessment Q - Fuel Expenses

Vyvyan

Hello,

I am due to submit my tax return but I am worried at the amounts I have got for my vehicle and fuel expenses. Im a self employed sole trader offering a service of repairing instruments and teaching at local schools in my area on a part time basis (Iam also employed part time as an employee)

Previous to me having my own car, I would hire a car for a weekend (claiming a for 1 day of use £11.50) to enable me to collect and drop off instruments I had repaired to shops. This wasn't a regular thing for me to do but I have done it at least once a month at various times since I started being self employed. The distance I covered was approx 220 miles and thus the cost of this at 40ppm is £88.00. But doing these journeys didn't cost me that amount in actual fuel, only about £20/30 (which I have kept the reciepts for) I did this in order to help establish my business more when I moved nearer to the area I did this work in and these were journeys I wouldn't have to make if I wasn't self employed.

Additionally I cycled to and from schools I taught at locally, at the 25ppm rate (approx varying around 8 miles/wk)

After doing sums regarding ins and outs of money over the year this has left my outgoings looking more than my incomings by nearly a grand.

Is 220 miles a reasonable amount to claim at £88? Is it possible to submit a return having more going out than in? This is my first tax return and I understood it wasn't going to be easy. Will I have to take out all my mileage expenses if this appears as a regular place of work?

Many thanks for any help and advice offered.

.

mrkbrrws

If I have understood this, your only motor expenses were car hire and fuel. The 40p rate is based on owning the vehicle and includes all running costs and depreciation.
[STRIKE]
It would seem that you should really just be including the cost of car hire and the actual cost of the fuel.

I don't think that the 25p cycling rate is allowable, I believe it is only an amount which an employer could pay you tax-free, but is not applicable to the self employed. You would be allowed to deduct the actual costs of cycling, if any.[/STRIKE]

mrkbrrws

As http://www.hmrc.gov.uk/helpsheets/hs222.pdf states, apparently 20p is allowable for cycling.

Also from http://www.hmrc.gov.uk/manuals/bimmanual/BIM47701.htm "It is not necessary for a person who claims mileage rate basis to be the legal owner of the vehicle. All that is necessary is that the taxpayer claiming the expense is paying the costs of running and maintaining the vehicle".

On the basis that hiring is the equivalent of paying for the costs of the vehicle, then this also seems allowable. I got the impression that the OP was going to deduct both the hire cost and the 40p, which would be wrong.

ManwithVan

Further to points raised here.
I see where you are coming from.
I recently became self employed and will need to complete my first tax return.
Put simply, i thought it would be a case of total incomings in one column, minus (in my case fuel for my van, used solely for my business) in the other.
What's left is my profit and on this i would pay 20% to the Tax Man.
But this allowance of 40p for every business mile i make confuses me, given that currently this financial year i have paid out £998 on diesel fuel, and at the moment mileage i have covered, is 7295 business miles.
This by my reckoning equates to £2918 mileage allowance on which i do not have to pay tax.
Maybe i am missing something here, but quite obviously £2918 far out weighs my actual costs of £998 !
I would much rather claim for the amount i have actually paid (all receipts readily available.)
Confused and perhaps a little "green" !!!!!

John_Pierpoint

What about all the Depreciation, Road tax, Insurance, MOT, Tyres, Brakes, Servicing, Repairs, ...........................
The 0.40 per mile is meant to cover your motoring costs. Don't forget it is tax relief - ie earnings on which you don't pay tax and National Insurance.
If you are doing serious load lugging in a traffic hell hole (eg London) you would be better off claiming all your costs in detailed accounts even with the advantages of diesel economy.