Possible self employment and mileage tax relief help.

deano3

Hi all,

Im thinking of becoming a soletrader in which the companys i invoice will pay me .45p mileage to/from site when out of usual office hours.

Im trying to establish before i make the leap if i will have to pay tax on the mileage the companys would pay me, for example, i am paid £3500 a month, of which £500 was the mileage payment. Do i work out my taxable income as 3k or 3.5k?

Further, i wont get paid mileage during standard office hours so i would assume i can deduct the cost of mileage at .45p from my taxable income?

Thanks in advance

BoGoF

Sounds a bit strange tbh - why are they only paying mileage when it's out of office hours travel.

What type of work will you be doing?

Tom99

Yes I think you are correct, mileage at 45ppm would just be one of your allowable expenses.

deano3

BoGoF wrote: »

Sounds a bit strange tbh - why are they only paying mileage when it's out of office hours travel.

What type of work will you be doing?

Thats a good question and something i still need to find out.

deano3

Tom99 wrote: »

Yes I think you are correct, mileage at 45ppm would just be one of your allowable expenses.

Thanks for your reply, so you think i would pay tax on the 3k only in the example used?

BoGoF

You would declare the full £3500 as income then claim travel expenses as a deduction in your accounts. Remember only the first 10,000 miles a year attract 45ppm....after that it's 25ppm

00ec25

on what basis do you regard yourself as self employed? If the company won't pay your mileage for "standard office hours" are you in reality simply commuting to and from work?
Commuting applies to sole traders just as much as it does to employees if the attendance at the place of work is regular

you must declare all your income, that includes and mileage you have charged your client. Whether you get tax relief on that income, in the form of submitting a mileage claim, depends on your genuine self employed status.