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Ominicci
03-09-2009, 09:04 AM
There are two methods of claiming your motoring costs against business expenses. In either case you will need to keep a record of ALL the business mileage that you do. It was recommended in the HMRC workshop that you keep a business diary to record everything business related including business mileage as well as appointments etc. If you have forgotten to do this then an estimate of mileage using an on-line routefinder (e.g. AA) would be OK.

Mileage Rate Method;

This uses a fixed rate per business mile travelled and can only be used if the annual turnover (money in) of the business does not exceed the VAT registration threshold (£68K for 2009/10) and you do not claim any other motoring expenses in including Capital Expenditure. It is designed to cover all aspects of motoring including fuel, insurance, repairs, breakdown cover, tax disc, oil, MOT etc

It is better to use this method if you have more than one car available for use. You do not need to keep any receipts for fuel etc.

Mileage rates:
Per mile for Per mile for any
first 10,000 miles further miles

Cars & Vans 40p 25p
Motorcycles 24p 24p
Bicycles 20p 20p


Actual Cost Method;

You must keep a record of all motoring costs including receipts for fuel, repairs, insurance, breakdown etc etc. If the vehicle is also used for private use you can only claim the proportion of costs that relate to the business. You must also make an annual reading of the vehicle’s mileage.

The proportion you claim for business use is the percentage of the total mileage. E.g if you do 4000 business miles but 10000 miles all together over the year, that is 40% of the total as business mileage and so you can claim 40% of your motoring costs as business expenses.

If you have bought a vehicle primarily for business use then the cost of purchase will go against Capital Expenditure and be subject to depreciation (this is where it is useful at this stage to have an accountant!)

NOTES
You can only choose one method and you can only change the method used when you change the car (sell/buy).

You can also claim parking and bridge toll fees separately in addition to the above for business trips.


Please add more if you have any useful tips etc. :Y: