If you run your own business or drive a car for business reasons, tracking your miles can lead to tax relief. We've put together the Ultimate Guide to Mileage Tracking to offer more details on how you may be leaving money in the road if you're not tracking your miles.
If you drive your car or other vehicles for business or work purposes, you need to track your miles. Why? Because it will save you money on your tax bill.You can claim tax relief if you use your own vehicle on business trips. This tax relief can put money back in your pocket. Often, this can be quite a lot. If you use simplified expenses to calculate your deduction, you can deduct 45 pence for every business mile you drive during the tax year, up to 10,000 miles.For example, if you drive 10,000 miles for business during the year, you’ll be entitled to tax relief of £4,500. How much will a £4,500 deduction save you on your tax? It depends on your income. If you’re a basic rate payer, you’ll save 20 per cent income tax and 9 per cent National Insurance contribution. Thus, your savings will be = £1,305
Of course, the HMRC isn't just going to take your word for how many miles you drove for work. In fact, the HMRC can impose a penalty of up to £3,000 if you fail to maintain and keep records.You're going to have to keep a mileage log. There are many ways to do this but automatic apps like MileIQ make it easy to focus on your business while knowing your miles are being taken care of.
If you run your own business or drive a car for business reasons, tracking your miles can lead to tax relief. We've put together the Ultimate Guide to Mileage Tracking to offer more details on how you may be leaving money in the road if you're not tracking your miles.
If you drive your car or other vehicles for business or work purposes, you need to track your miles. Why? Because it will save you money on your tax bill.You can claim tax relief if you use your own vehicle on business trips. This tax relief can put money back in your pocket. Often, this can be quite a lot. If you use simplified expenses to calculate your deduction, you can deduct 45 pence for every business mile you drive during the tax year, up to 10,000 miles.For example, if you drive 10,000 miles for business during the year, you’ll be entitled to tax relief of £4,500. How much will a £4,500 deduction save you on your tax? It depends on your income. If you’re a basic rate payer, you’ll save 20 per cent income tax and 9 per cent National Insurance contribution. Thus, your savings will be = £1,305
Of course, the HMRC isn't just going to take your word for how many miles you drove for work. In fact, the HMRC can impose a penalty of up to £3,000 if you fail to maintain and keep records.You're going to have to keep a mileage log. There are many ways to do this but automatic apps like MileIQ make it easy to focus on your business while knowing your miles are being taken care of.
