self employed - fair wear and tear on vehicle

gogo123_2

hi there

my friend is currently self employed and works for a big company all over the country putting fencing up near railways(before he joined they all used to be employed by the company butt all now S.E)

at the moment he uses his own vehicle to jobs and the company pay the fuel but should they also pay or fear wear and tear on his vehicle.?

many thanks

Andy_L

Depends on his contract.

Legally they can pay as little as they can get away with without people leaving, although if they pay less than HMRC's limit of 40p/mile (45p?)you can claim the tax back on the difference. If they choose to pay more than that llimit you pay tax on the extra

System

If they are paying mileage then that and any tax that is claimed back through HMRC (if payment is less than the HMRC limit) covers for FW&T and all other costs for the vehicle.

chalkie99

Don't know the details of your friends vehicle, obviously, but lets assume he has a van which does 40 mpg. Fuel at £1.40 a litre works out at £6.35 a gallon so he would use 16p per mile fuel. (Figures rounded off).

He can put 45p a mile against his tax bill for the first 10,000 miles a year and then 25p a mile for mileage over that.

He should be able to work out the difference between what the company is paying him and those figures and claim the difference.

That covers all his vehicle costs though. He cannot claim insurance, road tax, servicing, etc on top so see what he is actually claiming at the moment.

Jarndyce

Am I missing something here?

The OP asked whether the company for which his friend is working as a self-employed person should pay for the wear and tear on his vehicle. The answer is no - he should take that into account in pricing his services.

Hammyman

gogo123 wrote: »

hi there

my friend is currently self employed and works for a big company all over the country putting fencing up near railways(before he joined they all used to be employed by the company butt all now S.E)

at the moment he uses his own vehicle to jobs and the company pay the fuel but should they also pay or fear wear and tear on his vehicle.?

many thanks

They don't need to pay for anything. He is self employed and they are his customer not his employer so of course he has to use his own vehicle. It is up to him to factor in transport costs in the amount he charges them.

He has only two options and none of these are from his customer but to do with writing off income.

Option 1: Claim all the expenses of running the vehicle as a business expense. If he uses that vehicle for private use, he can only claim the percentage of use that is business use. Class any payment for fuel from his customer as income.

Option 2: Claim mileage for all business use at HMRC rates of 45p per mile for the first 10,000 miles. Class any payment for fuel from his customer as income.

Option 2 is by far the easiest to administer, requiring just a record keeping of the business mileage. However Option 1 may be more beneficial for tax purposes if it is an expensive vehicle to run.

Mistral001

As others have said, it depends on what the OP wants to charge. he can charge as little or as much as he wants for travelling expenses. It is up to him to set his rates for which he offers his services.

It would appear that the OP's friend is being treated as an employee in all but name. This is actually against HMRC rules. To be self-employed generally you have to be able to set the times you work and be offering your services to more than one customer. In this case the OP's friend seems to have only one customer, ie the firm that used to employ him. The following link might help:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_4015975