I know this subject has been done to death, but I can't seem to extrapolate the info I need from the other threads......so here I am starting a new one!!
Q1. Does the Mileage Allowance (40p/25p per mile) cover all motoring expenses or just fuel?
Q2. What other option is there for claiming business use expenses for a private vehicle?
In my ignorance, I have for donkeys' years always claimed 75% of all motoring costs as business use! It's never been questioned. Is this still an acceptable method?
And while I'm at it, what about home office? I have always divided Electricity, etc. by the number of rooms in my home, and used that figure for business use. I use the office much more for business use than private use.
Thanks in advance.
Matthew
-- Edited by Minty on Friday 9th of April 2010 02:37:31 PM
Hi Minty, I can only answer one of your questions the first one, from what i believe is that the 40p a mile up to 10000miles and 25p there after takes into account wear and tear not just fuel, someone else might better explain it to you...
the mileage allowance covers all expenses related to the business using your car.
Think of it as a petrol included hire fee. The business pays you per mile. There is nothing else that you can claim. The payment is tax free!
The % method is still available but you must keep a log of all business mileage and the % applied must be consistent with the log. This isn't just a 75% sounds about right.
Sometimes its best to get all of your figures, type them all into a spreadsheet and work out under which method you would be better off.
Invariably it's the mileage allowance but as has been written in other posts such all depends upon the mileage you do and how thirsty your car is.
Hope that this helps,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Matthew - Not sure if you're VAT registered, but if you pay yourself 40p per mile, you can claim back VAT on a proportion of it, depending on the size of your engine and the fuel type.
For example, if you have a 2000cc petrol car, you can claim VAT on 14p per mile. Just make sure you have fuel receipts to the value of the VAT you are reclaiming.
