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Self Employeed and Vehicle Expenses

  • 12 posts
  • # 96818

Please help? I have a new customer who privately owns a van and will be using it partly for work and partly for private use. I have been looking on the HMRC website and I am now going boss eyed! He will be under the VAT threshold so does he have to record all his mileage and then claim the 45p/24p per mile? Can we just apportion it 50/50 or what ever he believes it will be, or do we have to record the mileage and then see what the split is at the end of the tax year and apportion it accordingly?

Sorry, but there is so much information out there and some of it seems to be out of date and it keeps refering to cars and motor bikes, so does this cover vans as well? I've only been doing this about 2/3 years and I just want to make sure I get it right.

Thanks, 

Abby

  • 794 posts
  • # 96819

Hi Abby,

It is easier for client to record dates, start & end mileage, purpose of journey for business use either on a spreadsheet or in a book and then you can calculate the total business mileage of van.

The first 10,000 miles at 45ppm and any over this amount at 25ppm.

HMRC set this rate per mile which includes allowance for road tax,insurance & repairs so these things cannot be claimed if using this method.

However, if he is using it more for business than personal then he may be better using the apportionment method. He would still have to record business mileage for the tax year. If you get mileage of van at start of tax year and again at the end of tax year and calculate the total miles the van has done and work out what is personal & business you will be able to calculate the % of business use. Then you can apply this % to all vehicle expenditure and just claim for the business use. So if business use turns out to be 60% calculate 60% of all expenditure and compare it to the 45ppm method.

Whichever way you go you cannot change the method you have started with that vehicle. I do believe you can change the method if the vehicle is changed to another one.

Hope this explains it for you.

Marilyn

  • 12 posts
  • # 96824

Marilyn,

Thank you so much for your reply it has been so helpful. I dont know why HMRC has to make it so complicated.

Regards,

abby

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