self-employed - mileage claims

john3:16

Hello,

I am self-employed and I have been working for a client over the last 3 months or so and claiming 40p per mile (under 10,000 miles) tax relief.

I am about to undertake a new (self-employed) contract with another client next month. This may be a longer-term contract for my business - with little or no other clients during that time.

How long can I work for this new client (i.e. go to their site etc) before I can no longer claim 40p per mile back (and 25p over 10,000 miles) in tax relief?

Thanks
Gerry

fengirl_2

There is no limit to the amount of mileage any business can incur - as you have identified, over 10,000 miles and you only claim 25p, but this has no limit.
It might be worth keeping records of your actual motoring costs as some posters on here have suggested that 40p/25p a mile no longer covers the actual cost of motoring. It might therefore be more advantageous to include the actual costs of running your car in your accounts and then adding back privtae use in your self assessment.

Elaine_Wilson

There is no restriction based on time. You might be thinking of the situation with an employee where journeys to a site will be deemed non-business if the work at that site is sheduled to last more than two years.

As self-employed you can claim for all business mileage. Travel from your home to your "business base" is considered private and therefore not allowable. So you will need to establish that your business is based at your home.

It is difficult to say much about this in general as the facts in each case will be different. If you have worked for a succession of clients for short periods then you will probably be OK.

The classic case about this is Horton v Young (1971). Have a read of this page in the Inspector's manual. Although it's about a different case the comments at the bottom indicate the sort of thing the judges were looking for.