Allowable vehicle costs

roseview

OH is a tactical worker. He makes calls at any number of places (1 to 12) each day, which involves a lot of travel. He is employed by about 20 different companies. In the past his travel has been claimed under the 40p rule.

He is now also doing similar work on a S/E basis also. Does the travel for this also get claimed on the same basis or is there a choice? Due to the high mileage he does he has had to get a different car. How can he best maximise allowances for this?

fengirl_2

As a sole trader, yes, he can include the 40p/25p rate in his accounts. Or he can include all his car costs in his accounts and then addback the private use in his self assessment as well as claiming capital allowances. Once he chooses one method, he can't change, so its best to keep records to enable him to compare costs over, say, a 3 mths period to see which is the most beneficial.

roseview

The main question here is about being able to offset some of the costs of having to get a new car. This is an essential part of both the S/E and PAYE work, as he could not do the work without it. Surely, the 40p does not have enough leeway to cover all car expenses and depreciation in the car?

fengirl_2

The 40p pm is expected to cover all the costs of running the car, including depreciation. Which is why I have suggested that he keeps records for both methods for a while and then plumps for the method which is most beneficial to him.
If any of the mileage relates to PAYE work, he can only claim under the 40p/25p pm method - for self employed work, he has the choice.