Can I claim car servicing fees as well as 40p mileage?

Ginger_Winner

I have a limited company for which I use my car to visit clients, attend meetings, etc. I would say that 90% of my car use is just for work.

I claim 40p per mile for such business use. My car is 10 years old and I recently had to have quite a lot of work done to it when I put it in for a service. Am I able to claim a proportion of the costs of these maintainance costs in addition to the 40p milage claims that I put in or do I have to finance these costs myself?

Advice would be greatly appreciated....

heretolearn_2

No, it's one way or the other.

Either a mileage 'expenses' arrangement (your 40p)
or
Claiming actual costs as a business expense

You can't do both.

antrobus

Ginger_Winner wrote: »

...I claim 40p per mile for such business use. ...

It's been 45p a mile for the first 10,000 miles since the 2011-2012 tax year.

thenudeone

AFAIK employees have to use the approved rates for tax purposes, only the self-employed can opt to use actual costs instead (for example if you run luxury cars as a high-profile entertainment manager)

ILW

You could run it as a company car, then all servicing is an expense. The BIK can be scary though.

thenudeone

If the car is owned / leased by a company then the company can claim all the actual costs as allowable expenses for the company; however, the employee will then be taxed on a benefit in kind.

If the company has just one employee, in most cases it's better for the company to pay the employee the (reasonably generous) hmrc rates, and for the employee to buy or lease a car themselves. That way the employee has no tax liability.
But remember that you shouldn't pay employees a mileage allowance for travel to and from a fixed place of work - this would be a taxable benefit if you did.

Ginger_Winner

That's clear. Many thanks for the replies.

chrismac1

It's worth noting that the 45 pence per mile excludes:

1. Car parking.
2. Finance costs if car bought on HP etc.

So these can be claimed separately.

longforgotten

Christmac, I'm confused

I understand the bit about an employee claiming 45p per mile and being able to claim car parking expenses incurred for their work too.

But why would they be able to claim the HP interest on their private car from their employer ?

roger_c

They don't claim it from their employer they claim it as a tax relief from HMRC. So they would get tax back on the business portion of HP interest paid and 'business parking' which is not covered by the 45ppm/25pppm relief.

AIFOP

chrismac1 and roger_c,

I would really appreciate further details on how to claim tax relief on loan interest for my car, which I use about 50% personal, 50% business use.

I am a shareholder and director of a ltd company, so complete a self assessment form every year.

All I can find when searching on the internet is either:

It is no longer possible to make a claim for tax relief on loan interest to buy a car, nor is it possible to claim capital allowances or tax relief for the actual expenses incurred in running a car.

or to the contrary from HRMC helpsheet HS340 the following:

to buy equipment or machinery for use in your work for your employer, or by a partnership (unless you have already deducted the interest as a business expense) – provided that you, or the partnership, were entitled to claim capital allowances on the item(s) in question. If the equipment or
machinery was used only partly for your employment, or only partly for the partnership business, only the business proportion of the loan interest or alternative finance payments qualifies for relief. Go to www.hmrc.gov.uk for more information about relief for interest on a loan and alternative
finance payments under an alternative finance arrangement taken out to buy a car or motorbike that you use in your work for your employer.

However, further information is not on their website.

Help would be appreciated!