Back in December 2010 I wrote about claiming expenses from your business relating to the business miles you drive (http://bit.ly/gh1s0t ).
Unless you drive in excess of 20,000 miles a year, you will be far better off claiming for each mile you drive, than to try and take a tax hit, or claim a percentage of your direct costs.
You may recall that, in the recent budget, the rate you can claim for the first 10,000 miles has increased from 40p to 45p. This gives you a potential extra £500 per year to claim.
If you use your own car for business purposes, you should be claiming expenses to offset the costs that you are incurring. As well as the fuel you use, you are allowed to claim for running costs such as repairs and maintenance, MOT, tax and insurance.
It doesn’t matter of you are self employed, or working for a company, as long as the miles you travel are for the business, and are not personal. The exception to this is your regular commute. You cannot claim for the miles driven to and from work, if you work at the same place most days. However, trips to the post office to buy stamps, to visit clients or suppliers, to visit business partners, or attend meetings are all allowable.
You may not know this, but you can also claim reimbursement if you use a bicycle to get around for business. A few years ago, the government introduced a mileage rate if you use your bicycle for business. A great way to stay fit, help the environment, and claim a tax deductible expense!
If you are VAT registered, you will need to collect VAT receipts for your fuel (not necessarily for the actual fuel you use), ensuring that the receipts are dated within your claim period.
I have created a very simple spreadsheet to help you calculate how much you can reclaim as expenses if you use your own car (or bicycle!). If you would like a free copy, please call or email me, and I’ll let you have a free copy.