Self employed car expenses

gardenlady_2

I am confused about what I can claim for my car on my tax return. I am mostly reimbursed for the mileage I do, I add it to my invoice. should I actually be putting this down on my return as income and then putting petrol, tax, mot etc down as an expense? In the past, the company I was doing work for paid less than 45p per mile, but they have put this up recently. Also, what do I do about the mileage I do for work that I am not reimbursed for? Hope this is clear, and thanks for any advice!

HappyMJ

First 10,000 miles claim 45p a mile and then 25p a mile. You declare what you got as a mileage reimbursement as income and claim all of it as an expense.

You can claim a portion of each expense seperately if you have every single receipt and if the deduction is higher than the above. It's generally too much hassle calculating it this way for what is just an extra couple of pounds.

gardenlady_2

Thanks! I am still a bit confused though... doesn't that mean that one cancels the other out?eg I show 45p per mile as income, then claim 45p per mile as an expense? I have to confess that I sometimes drive instead of train because of the financial advantage, but it seems there isn't one really. Am I right?

nomunnofun

gardenlady wrote: »

Thanks! I am still a bit confused though... doesn't that mean that one cancels the other out?eg I show 45p per mile as income, then claim 45p per mile as an expense? I have to confess that I sometimes drive instead of train because of the financial advantage, but it seems there isn't one really. Am I right?

You don't physically 'take' 45p per mile out of the business and so there is no 'income'. You simply include this as an expense in your self assessment.

jimmo

Any payments you receive from your clients are takings and need to be recorded as such.

Any expenses you incur running your business are expenses to be deducted from your takings to establish your profit.

So, you are right. If your client pays you 45 ppm and you decide to use the HMRC approved rate of 45ppm the figures will be self cancelling but they both need to be there for clarity.

I don’t understand your question in post #3 about driving and taking the train but if you mean that you charge your client the train fare but drive instead the accountancy and tax answer remains the same. What you charge your client is takings. What you actually pay out is expenses.