Allowable travel expenses

mulready

I have a job, but I also take one day a week and random days in lieu to be self employed (not VAT registered). I do a lot of traveling to antique fairs and selling / shopping trips to other dealers on these days off and weekends. In fact, my time out of work is dedicated to my own business.

In 2010 / 11 I bought a motorbike with proceeds from my business. The idea being that I could quickly get around London in the little time I have to see restorers, dealers, and go to auction houses etc etc.

My question is, can I charge the bike (£2000) to my travel expenses? As well as charge 25p / mile for usage? As it was purchased to facilitate business, I can surely claim for it and the cost of insurance??

Please advise!

BoGoF

mulready wrote: »

My question is, can I charge the bike (£2000) to my travel expenses? As well as charge 25p / mile for usage? As it was purchased to facilitate business, I can surely claim for it and the cost of insurance??

Please advise!

Why do you say surely?

You can either claim capital allowances and actual running costs (apportioned for business use) or 25ppm, not both

pjclar02

Hello there

You need to run a few numbers and work out which would be more beneficial. It will depend upon how many business miles and how many personal miles you travel on the bike.

You can claim the cost of the bike under the capital gains tax rules and save tax at your marginal rate. However, if you only use the bike 50% for business and 50% for personal use you can only claim 50% of the cost under capital allowances.

You can also then claim 50% of the running costs - insurance, road tax, repairs, fuel etc.

Alternatively, you can claim tax relief for the actual business miles undertaken at 25p per mile.

Try plugging some of the actual numbers in to the above and see which works out best. You are right that you can claim for the business use of the bike, but you have to apportion this out first.

Hope this helps.

mulready

Thanks, thats very helpful. I can certainly see which option would make better sense. Regards, Nick