Taxes
Business mileage is something you'll need to take into account as part of running a business and paying tax. The good news is that HMRC allows you to make claim business mileage on your taxes.
If you're like most self-employed people, your motoring expenses will comprise partly business expenses and partly private expenses. On the one hand, you use your vehicle for shopping, going to the gym and visiting great aunt Mabel, while on the other, you need to visit clients - and occasionally the bank manager.How do you separate the two? For tax purposes, HMRC gives you two options:
Most small businesses find the second method more convenient. You should note, though, that you can't adopt a combination of both methods. And once you've decided on one route, you're stuck with it until you invest in a new vehicle.
You should keep detailed records of all your motoring expenses. That's fuel, road tax, insurance, servicing, RAC and so on. You should also keep a book that records your business mileage.You can then claim the portion of these costs that are associated with the business use of your vehicle. For example, if you spent £4,000 on your vehicle and used it 50 percent for business, you can potentially claim £2,000 on your taxes.
The HMRC also lets the self-employed claim a fixed business mileage allowance. Simply log your miles and multiply your mileage by the rates.An app like MileIQ makes it simple to log and calculate the value of their mileage. You just do your job, drive like you normally do and MileIQ will automatically log your miles for you.
