If you are self employed, you probably use your car for your business and that means you will incurr costs to keep the car running.
So what is a car….
A car for tax purposes is any motor vehicle of a kind normally used on public roads which has three or more wheels and either:
- is constructed or adapted mainly for carrying passengers or
- has to the rear of driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows
If you had a commercial vehicle instead of a car its likely that all the costs would be business costs because there would only be minimal incidental private use.
HMRC have just released a video to explain how you can claim motor expenses….
Bascially you can claim either a % of the total running costs (Actual Cost Method) or a mileage allowance payment.
The mileage allowance is 45p for the first 10,000 miles and then 25p per mile after that.
Using the Actual Cost Method you can claim a % (relating to business use) of :
- Capital Allowances (these help you recover tax on the purchase price of the vehicle)
- Fuel
- Road Tax
- Maintenance
- Insurance
- MOT
- Repairs
You may have other costs which are ‘wholly and exclusively’ for business such as:
- A Sat Nav to find customers and make deliveries
- Signage on the vehicle
- Modifications
Basically if a cost is ‘wholly and exclusively’ for business then you can claim 100% against tax.
steve@bicknells.net
