Self employed, 45p per mile business mileage

Jeremy535897

Most definitely not. The mileage allowance is supposed to include depreciation on the car, although at current fuel prices, that is unrealistic. Unless your business mileage is low, or the vehicle doesn't depreciate, or is rarely changed, I would question the wisdom of using mileage allowance.

Jput

Oh really?...hope I haven't messed up here....my business mileage averages around 4500 miles. A few years ago an accountant told me that mileage allowance was almost certainly the way to go...but perhaps the landscape has changed with rising fuel costs etc

[Deleted User]

Jput said:

Oh really?...hope I haven't messed up here....my business mileage averages around 4500 miles. A few years ago an accountant told me that mileage allowance was almost certainly the way to go...but perhaps the landscape has changed with rising fuel costs etc

4500 miles at 45p is £2025. Is this more beneficial that claiming actual fuel (at 45 mpg around £900), capital allowances, repairs, insurance, tax?

Jeremy535897

The capital allowances one is the one people find hard to judge. They look at the writing down allowance. But if you change your car regularly, you get a balancing allowance regularly, unless the car doesn't depreciate.

Albermarle

Jeremy535897 said:

Most definitely not. The mileage allowance is supposed to include depreciation on the car, although at current fuel prices, that is unrealistic. Unless your business mileage is low, or the vehicle doesn't depreciate, or is rarely changed, I would question the wisdom of using mileage allowance.

Is it possible that the 45p/25p will be increased in light of increased fuel prices ( for some time now ).

On the other hand in the last couple of years cars have not depreciated, due to the shortage of new and second hand cars, so maybe that compensates for the fuel increase.

[Deleted User]

Albermarle said:

Jeremy535897 said:

Most definitely not. The mileage allowance is supposed to include depreciation on the car, although at current fuel prices, that is unrealistic. Unless your business mileage is low, or the vehicle doesn't depreciate, or is rarely changed, I would question the wisdom of using mileage allowance.

Is it possible that the 45p/25p will be increased in light of increased fuel prices ( for some time now ).

On the other hand in the last couple of years cars have not depreciated, due to the shortage of new and second hand cars, so maybe that compensates for the fuel increase.

Don’t think any government thinks too much about impact on the good citizens. My favourite example:

Pensioners aged 80 and over receive an addition of 25 pence to their state pension. The age addition was introduced in 1971, in recognition of “the special claims of very elderly people who on the whole need help rather more than others”

52 years later - It’s still 25p!

Dazed_and_C0nfused

[Deleted User] said:

Albermarle said:

Jeremy535897 said:

Most definitely not. The mileage allowance is supposed to include depreciation on the car, although at current fuel prices, that is unrealistic. Unless your business mileage is low, or the vehicle doesn't depreciate, or is rarely changed, I would question the wisdom of using mileage allowance.

Is it possible that the 45p/25p will be increased in light of increased fuel prices ( for some time now ).

On the other hand in the last couple of years cars have not depreciated, due to the shortage of new and second hand cars, so maybe that compensates for the fuel increase.

Don’t think any government thinks too much about impact on the good citizens. My favourite example:

Pensioners aged 80 and over receive an addition of 25 pence to their state pension. The age addition was introduced in 1971, in recognition of “the special claims of very elderly people who on the whole need help rather more than others”

52 years later - It’s still 25p!

Closely followed by the £10 Christmas Bonus!

Albermarle

[Deleted User] said:

Albermarle said:

Jeremy535897 said:

Most definitely not. The mileage allowance is supposed to include depreciation on the car, although at current fuel prices, that is unrealistic. Unless your business mileage is low, or the vehicle doesn't depreciate, or is rarely changed, I would question the wisdom of using mileage allowance.

Is it possible that the 45p/25p will be increased in light of increased fuel prices ( for some time now ).

On the other hand in the last couple of years cars have not depreciated, due to the shortage of new and second hand cars, so maybe that compensates for the fuel increase.

Don’t think any government thinks too much about impact on the good citizens. My favourite example:

Pensioners aged 80 and over receive an addition of 25 pence to their state pension. The age addition was introduced in 1971, in recognition of “the special claims of very elderly people who on the whole need help rather more than others”

52 years later - It’s still 25p!

OK fair point, but when I was working, I had a paid for company car except that I paid for all the fuel, business and personal. I claimed back the business fuel at X P per mile, in line with HMRC suggested/maximum rates. These used to change when fuel prices changed significantly, from say 13p to 14p a mile for example. So hence wondering about the 45p/25p rates.

Jeremy535897

Given that allowances have been frozen until 2028, I would say that there is little chance of any movement on this.

Grumpy_chap

Albermarle said:

Is it possible that the 45p/25p will be increased in light of increased fuel prices ( for some time now ).

Anything is possible.
The current 45 pence rate was introduced in 2011.  Rates are stated as frozen for the next few years.
The Government could change this, there is a budget in a few weeks' time.
I would not consider it likely.

As regard the original query from the OP, I wonder whether the concern about receipts is linked to the way some employers require receipts for petrol to cover mileage claims in connection with the way they account for VAT?  I am not sure that such admin is still required, or ever was required, for companies.  In the OP's case, sole-trader, non-VAT-registered, there would be no benefit in retaining such receipts and such expenses do not need to be recorded (subject to the comments by others that the vehicle either had to be actual cost or mileage and can not chop and change at will between the two approaches).