John P
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| posted on 9/11/10 at 04:40 PM |
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Using Car for Self-Employed Business. What tax records do I need?
I recently started up as a self-employed handyman and as I can't afford to run two vehicles am using my normal car for work as well as
domestic.
I believe I can claim a proportion of the running costs on my tax return but what sort of records will I need?
Because I do a lot of running around (often just short trips) it will be very time consuming to itemise every journey. Could I just assess my
business mileage and ratio this against my total mileage or will they need more detail than this.
What are others doing? I'm really after the simplest acceptable solution as I'm not good at keeping routine records.
John.
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RichardK
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| posted on 9/11/10 at 04:55 PM |
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We have to do a daily mileage which isnt too bad once you get in to the habit.
Here is the spreadsheet we print out and keep in the car.
Linky
Cheers
Rich
Gallery updated 11/01/2011
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BenB
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| posted on 9/11/10 at 05:08 PM |
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Really you should do a mileage. As said it's not that tricky. Just keep a little notepad in the car and record mileages. Fundamentally you just
need to prove you're keeping a record, it would be difficult for the IR to prove your recordings are incorrect (unless you appear to have done
more miles than your car has actually done  ).
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minitici
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| posted on 9/11/10 at 05:23 PM |
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Simplest way to claim for self-employed business use of vehicles is to claim the mileage allowance of 40p per mile up to 10000 miles then 25p per mile
thereafter.
You just need to record those miles which are wholly for business use in the vehicles which you are using.
(Claim as part of self assesment)
If you claim the mileage allowance you are not allowed to claim any other vehicle related expenses as business expenses (i.e. petrol, tax, insurance,
repairs....)
[Edited on 9/11/10 by minitici]
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StevieB
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| posted on 9/11/10 at 06:13 PM |
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I just record the mileage I do for business, I don't bother with recording the mileage of the car as it's not necessary.
I find with everything to do with my business - the more complicated a system I set up, the less likely I am to stick to it.
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John P
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| posted on 9/11/10 at 06:24 PM |
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quote:
Originally posted by minitici
Simplest way to claim for self-employed business use of vehicles is to claim the mileage allowance of 40p per mile up to 10000 miles then 25p per mile
thereafter.
You just need to record those miles which are wholly for business use in the vehicles which you are using.
(Claim as part of self assesment)
If you claim the mileage allowance you are not allowed to claim any other vehicle related expenses as business expenses (i.e. petrol, tax, insurance,
repairs....)
[Edited on 9/11/10 by minitici]
This would probably be the best solution for me but is it OK as I'm not a Limited Company.
I was told by an accountant that claiming a mileage charge wasn't allowed if you are self-employed but not Limited (presumably because you
don't have to have audited accounts).
John.
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loggyboy
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| posted on 9/11/10 at 07:06 PM |
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WHen my wife was sole trading as a cleaner we just kept a record on her weekly timesheet of the miles traveled. when it came to tax return time we
just submitted the figures but gave no evidence. Its just a matter of having something in case they ask for it, which I would expect they only do if
figures are unusally high.
you cant claim milage exacly, but you can offset it as an expense to raise your taxible level.
[Edited on 9/11/10 by loggyboy]
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minitici
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| posted on 9/11/10 at 07:07 PM |
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Sack your accountant! - obviously incompetent 
At the end of your financial year - just add up all your business miles and multiply by the relevant mileage rate
(£0.40 for first 10,000, £0.25 for the remainder) and then treat this just like any other business expense in your accounts....
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phoenix70
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| posted on 9/11/10 at 07:41 PM |
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quote:
Originally posted by John P
I recently started up as a self-employed handyman and as I can't afford to run two vehicles am using my normal car for work as well as
domestic.
I believe I can claim a proportion of the running costs on my tax return but what sort of records will I need?
Because I do a lot of running around (often just short trips) it will be very time consuming to itemise every journey. Could I just assess my
business mileage and ratio this against my total mileage or will they need more detail than this.
What are others doing? I'm really after the simplest acceptable solution as I'm not good at keeping routine records.
John.
Slighty OT, but I hope you have informed you Insurance company that you are using your car for business purposes?
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JonnyS
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| posted on 9/11/10 at 07:43 PM |
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As an accountant... 
As a sole-trader, you can claim mileage (40p per mile for the first 10,000 and 25p afterwards) as long as your sales are less than the current VAT
threshold (£70,000). BUT you must keep detailed trip by trip records. Without this HMRC could (and do) disallow all expense claims if they
investigate.
Your other choice is to estimate your ratio of business to personal mileage and use that to apportion a share of all the costs associated with the
vehicle. HMRC are far less strict with this measure...
A good accountant will weigh the two up and see which is most beneficial for the client.
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loggyboy
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| posted on 9/11/10 at 08:31 PM |
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quote:
Originally posted by JonnyS
Your other choice is to estimate your ratio of business to personal mileage and use that to apportion a share of all the costs associated with the
vehicle. HMRC are far less strict with this measure...
Thats what the wife did with hers IIRC.
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