Mileage allowance for Self Employed

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groundy
groundy Registered Posts: 495 Dedicated contributor 🦉
Having a brain freeze on this one. I have a client who is a self employed joiner and is asking me whether he would be better claiming the costs involved in travelling within his car or claiming mileage allowance.

The difference is quite considerable so I want to be certain I have it right. I always though the mileage allowance was used for the reimbursement of expenses from your employer and I am fine with this procedure were it is a one man company but my initial though is that the self employed can not claim the allowance as surely you can not claim against yourself.

Hope this makes sense and thanks for any help offered.

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  • jilt
    jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
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    You can either claim actually motor running expenses less any percentage for private use or mileage
  • lorraine
    lorraine Registered Posts: 404 Dedicated contributor 🦉
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    he would be best to claim 40p per mile up to 10,000 miles then 25p per mile thereafter and this covers motor vehicle expense also, see http://www.hmrc.gov.uk/rates/travel.htm

    I'm pretty sure this would be the most suitable way, someone correct me if I am wrong!
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    Thank you both for the prompt reply - the link was useful as it lead to me finding the following:

    http://www.hmrc.gov.uk/helpsheets/hs222.pdf#page=3

    Unfortunately my client in this instance can not claim milege as he has previously calculted motor exp on actual costs in the past and you can not change the method of calculation unless there is a change in vehicle.
  • DOTTY
    DOTTY Registered Posts: 22 New contributor 🐸
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    Hi

    I have just clicked on link above.....................

    My husband is a sole trader, we recently purchased a van and are going to introduce it into the business, and claim write down allowance on it and putting through the books the 40p mileage allowance.

    However after reading the following:

    You may calculate your motor expenses using a fixed rate for each business
    mile, provided that:
    no other motoring expenses (other than interest on a loan used to purchase
    the vehicle) are claimed and no capital allowances are claimed on the
    vehicle (since AMAPs rates already contain an element to allow for
    depreciation)

    Does the above mean we can not claim capital allowances on the van if we go with the 40p a mile allowance?

    If we decided to put all the running costs of the van though, deducting our personal use element would we then be able to claim capital allowances?

    Thanking you all in advance for your advice.
    Dotty
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    DOTTY wrote: »
    Does the above mean we can not claim capital allowances on the van if we go with the 40p a mile allowance?

    Correct. The 40p covers everything including depreciation (thus capital allowances).
    If we decided to put all the running costs of the van though, deducting our personal use element would we then be able to claim capital allowances?
    Yes that's right.
  • DOTTY
    DOTTY Registered Posts: 22 New contributor 🐸
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    Thanks Monsoon,

    I was totally unware of the depreciation being part of the 40p.

    I think i will calculate both ways this next accounting year and go with the one that saves us the most money.

    Thanks once again,
    Dotty
  • jilt
    jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
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    Can I just check if you're claiming mileage instead of vehicle running costs can you also claim parking expenses? It's been a long week, my brain hurts! :001_unsure:
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    Yes.
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