Self-employed – claim rate per mile for use of car

There are simplified arrangements in place for the self employed (and some partnerships) to claim a fixed rate deduction for certain expenses where there is a mix of business and private use. The simplified expenses regime is not available to limited companies or business partnerships involving a limited company.

The simplified expenses include a flat rate per mile claim for use of a car. The present rates – that can be used instead of working out the actual costs of buying and running your vehicle (insurance, repairs, servicing, fuel) – are:

  • Cars and goods vehicles first 10,000 miles  45p
  • Cars and goods vehicles after 10,000 miles  25p
  • Motorcycles     24p

Using the flat rates is not compulsory. However, once a decision is made to use the flat rates for a specific vehicle this must continue to be used for as long as that vehicle is used for business purposes.

Planning note

The simplified claims process cannot be used for any vehicle that you have previously claimed any actual running costs, or a capital allowance.

The self-employed can continue to claim for all other travel expenses, for example, train journeys and parking, in addition to a flat rate mileage claim.

If you would like to investigate the benefits or otherwise of using this scheme for any vehicle that you are considering using in your business (and that will have a mix of business and private use) will can help you crunch the numbers.

Posted in Income Tax

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