Self-Employment

[Jonny69]

What's the best way to work out the business mileage? Is it a simple case of keeping track of how many miles you do for work, and claiming 40p per mile as the cost to the business?

No, you don't claim anything, it's like Vonhelmet said. You're the business, not an employee of a business claiming mileage allowances, so you put it through as an expense. Keep all your fuel receipts, servicing and insurance costs. Keep a tally of your business mileage and total mileage. You work out what your business mileage was as a percentage of your total mileage and that percentage of the total costs is what you put in as an expense. Example:

Fuel costs over the year = £1500

Insurance = £250

Servicing = £250

Total = £2000

Total miles covered = 10000

Business miles covered = 1290

Percentage business miles = 1290/10000 x 100 = 12.9%

So 12.9% of your total motoring was for the business so you put through 12.9% of your total motoring costs (£258) as expenses and you pay no income tax on that.

You can also put through a percentage of the depreciation in value of your car as an expense but I don't know how much of that you can put through legally. I had a pretty good idea what the depreciation would be, split it over the number of years I was planning to keep the bike for and put it in as an expense each year.

 

[Vonhelmet]

How would you work out the cost of fuel based on mileage if the car is used for personal and business?

Split your business mileage from your personal mileage.

 

[Mark M]

Dont bother with depreciation as you have to add it back as its a non deductable expense. Instead claim a capital allowance with a restriction for private use.

Again this is exactly what you pay a good accountant to advise you on.

 

[chippie]

as a sold trader you have a choice of how to calculate motor expenses.

1. the actual costs of your business motor expenses. actual cost of fuel, insurance and everything else. just the business proportion he you use the vehicle for private use. you can then claim capital allowances no the vehicle.

2. using mileage rates of 40p for the first 10k miles then 25p. this is the simpler option and most likely the most beneficial.

you have to decide what method to use and stick to it. you can only change method when you change vehicle.

 

[Moonpie]

I'm self-employed and believe everyone's advice in having an accountant on board for advice etc, is absolutely spot on. But wouldn't have thought she would need a book-keeper, best do it yourself and save the money. It's just a case of keeping receipts (for fuel etc) and logging them etc for your accountant.