Mileage/ Petrol receipt for Newbie Self Employed

lemonpopsicle

Hi, my husband was made redundant recently and is thinking of going self employed but we are confused about allowable expenses. We have been on a starting your business course and the course teacher said 'don't forget you can claim 45p a mile for attending this course as a business expense'. Can we also claim 45p a mile for all the miles when he is self employed (as a gardener) or do we put the petrol receipts in? Thanks in advance, sorry if it's a stupid question- it's all a bit daunting.

ChiefGrasscutter

I'm not an expert in this..but as I understand it.

You can claim at 45p/mile for all mileage soley in connection with the business (provided the total is less than 10K miles per year I think above that it's different rates)
You will need to keep detailed mileage records - where you went, when and the miles used - obviously.
They become an allowable business expense come the annual tax return time.

Note that if you share a car journey with some private business (ie visit client to do quotation then go on to do shopping at Tesco the mileage used is not allowable - as I understand the rules)

You cannot claim any other motoring types expenses (ie new brake pads whatever). The 45p/mile is an allowable expense by the inland revenue for use of private cars in business and is a sum which is intended to cover for both the petrol used and a proportion of the repairs/depreciation/MOT/tax/insurance of vehicle given that it is partly used for business etc)

Typical allowable mileage in his case would be visiting client for quote or to do the actual work (ie miles from home to work and back again), mileage to buy supplies, get fuel for the strimmer etc. Anyting soley in connection with the business.

PS ensure your car is insured for business purposes and not just "social and domestic" motoring.

lemonpopsicle

Thanks so much for your reply, we have already enquired about the cost of class 2 business insurance for the van. Are you a gardener too?

Thrugelmir

Keep your petrol receipts to substantiate the expenditure and indirectly the mileage. As they may get asked for at some point in time.

lemonpopsicle

Very good point, thanks

jimmo

lemonpopsicle wrote: »

the course teacher said 'don't forget you can claim 45p a mile for attending this course as a business expense'.

Please don't tell me that it was a course run by HMRC. Sorry to do this but, strictly speaking, that's wrong because the course you attended had the purpose of giving you new skills.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM35660.htm
For the self employed the mileage rate method is not compulsory but it is relatively straightforward and convenient.
However, keeping your petrol receipts is then rather pointless.
As you will be claiming a mileage rate you will need to keep evidence of the business mileage.
A work or appointments diary, essential anyway, plus a notebook kept in the van, recording the business journeys will be completely acceptable.

telboyo

In the unlkely event that HMRC look at your driving diary or appointment book make sure it is not full of bogus journeys just to make up the mi;les. They will expect that thge majority of those journeys generated income and your accounts will reflect that.

lemonpopsicle

Thanks peeps, it wasn't a HMRC course, it was a Business Initiative course and we didn't do many miles so we probably won't bother putting it down. We don't want to upset HMRC before we've even started!

taxing

Hi

Just wanted to add that small businesses can only use this concessionary method of claiming mileage for as long as the business stays below the VAT registration level - currently turnover (that's invoice income inclusive of expenses you have charged on to the customer) of £73,000 for the past 12 months (which you need to check on a rolling 12ms basis).

For each tax year you can claim 45p per business miles for first 10000 business miles travelled and then the rate drops to 25p per business mile. Each tax year starts anew and back at 45p for first 10000 etc...Tax Year is 6 April to 5 April.

Good Luck!

HappyMJ

taxing wrote: »

Hi

Just wanted to add that small businesses can only use this concessionary method of claiming mileage for as long as the business stays below the VAT registration level - currently turnover (that's invoice income inclusive of expenses you have charged on to the customer) of £73,000 for the past 12 months (which you need to check on a rolling 12ms basis).

For each tax year you can claim 45p per business miles for first 10000 business miles travelled and then the rate drops to 25p per business mile. Each tax year starts anew and back at 45p for first 10000 etc...Tax Year is 6 April to 5 April.

Good Luck!

Any business can use the 45p/25p method. I've worked for FTSE 100 companies and they use it.

andi1872

I know this thread is a little old now but as a pet sitter i'm using the 45p rate but i am confused about is keeping petrol receipts.

I keep a detailed spreadsheet containing the date, post code from and to, total miles, total expense and purpose of the trip but do i also need to keep the receipts for every time i fill up the car?