Self employed/ Partnership mileage

Ellabobbin
Ellabobbin Registered Posts: 92 ? ? ?
Good morning,

Does anyone have any ideas around this scenario....

A SE individual trades both under their own name and in 2 partnerships, using the same vehicle to travel.

If she had 3 separate employments she would be able to claim 10k miles @ 45p from each, however since she is not 'employed' is she limited to 10k miles combined... Ie if in once partnership she claims motor expenses for 6000 miles @ 45p she will only be able to put through a max of 4000 miles at the 45p rate in the second partnership accounts?

There is a good proportion of private use of the car and so the actual expenses route would not be the most tax efficient (and also a nightmare with 2 partnerships in the mix!)

Thank you!

Comments

  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    Ellabobbin wrote: »
    Good morning,

    Does anyone have any ideas around this scenario....

    A SE individual trades both under their own name and in 2 partnerships, using the same vehicle to travel.

    If she had 3 separate employments she would be able to claim 10k miles @ 45p from each, however since she is not 'employed' is she limited to 10k miles combined... Ie if in once partnership she claims motor expenses for 6000 miles @ 45p she will only be able to put through a max of 4000 miles at the 45p rate in the second partnership accounts?

    There is a good proportion of private use of the car and so the actual expenses route would not be the most tax efficient (and also a nightmare with 2 partnerships in the mix!)

    Thank you!

    I think the mileage method can be used with unincorporated entities such as sole traders and partnerships as long as their turnovers are below the VAT registration threshold.

    Assuming the entities' turnovers are below the VAT reg threshold, your client may still be limited to 10k miles @ 45p and 25p thereafter because HMRC may argue that all three entities are 'associated'.

    I look forward to being corrected.
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