Hi everyone, you were very helpful last time thank you, I need some more help.
I have been doing my own accounts for my own sole trader business and needs some help with mileage costs. I am claiming the mileage at the flat rate 40p for first 10000 miles.
Say I did 1000 miles this month so 1000 x 0.40 = £400, Does this £400 go down as an expense so if I earnt £1000 my profit that month would be £600?
I am confused when it says about the mileage relief being the amount x 0.2 (Tax rate) any clarification would be great.
the rate is now 45p per mile for the first 10,000 miles then 25p thereafter.
So, if you do 1000 per month, 12000 miles per year the company pays an expense of £5000 (45p * 10,000 + 25p * 2000).
Taking your profit figure of £12,000 then profit is reduced to £7,000 after the mileage expense.
HTH,
Shaun.
__________________
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.
Brilliant! So my actual tax will be a lot lower. If say I did 1000 miles in a month = £450, takings were £1k I would only be taxed on the £550? This will be great as I am likely to rack up a lot of miles for not a lot of money at the moment so the less tax the better.
Hi Danl, You can actually use mileage OR actual costs and I advise to use whichever gives the best tax advantage.
Sometimes, claiming petrol, road tax, insurance, repairs, servicing etc could be more tax efficient than claiming mileage but you also need to factor in any amount of personal useage. HMRC may also wish to see mileage logs if they ever review your accounts.
The 45p p/m rate came in from 6.4.11, so if you're doing your 2011 tax return (which a lot of people are at the moment), you still need to use the 40p figure.
If you take the expenses route, outlined by Dave, then you may claim anything between 10 and 100% capital allowances on the vehicle cost, to the extent that it is used for business purposes.
The 45p p/m rate came in from 6.4.11, so if you're doing your 2011 tax return (which a lot of people are at the moment), you still need to use the 40p figure.
Literally in my case. Just submitted it a couple of minutes ago. I've no idea why I waited so long.
__________________
Never buy black socks from a normal shop. They shaft you every time.
I think that those nice people at HMRC would have a heart attack in shock if they got mine before the final week so not wishing to cause them any distress I'll leave it as usual until the very last moment before sending it on it's merry way.
__________________
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.
I'm a last minute one too. A couple of year's ago I had a major panic did and sent self-assessment then found I couldn't pay more than 1000 on internet banking (this was 31st Jan evening) so I rang bank and although I couldn't remember my telephone banking code they paid the rest for me by telephone banking.
