Self Employed Claimable Motor Expenses

mann im auto

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.