As a self-employed trader, do you diligently record the mileage for every business journey you take? This attention to detail is necessary to convince HMRC that the cost of the journey is tax deductible.
There are several apps which can help you with this. One of which is ours which can be downloaded here.
The question is: where does your business journey start?
HMRC will argue that your work only starts when you reach your customer’s site and any business activities performed at your home-office are irrelevant. This would restrict your allowable travel costs to journeys between your customers and deny travel expenses for traveling from your home to the first customer of the day.
The key to claiming for journeys commencing at your home is to show that your business is truly based there. Are there business activities which can only be done at your home-office? It is a good idea to record the time you spend on activities at your home-office and what you were doing, eg contacting suppliers or drawing up quotes.
Once you have established the number of miles which qualify as business journeys you can claim 45p for each mile driven up to the first 10,000 miles and 25p per mile for any additional miles in the tax year. Alternatively, you can claim a proportion of your total motoring expense that relates to business miles compared to total mileage driven in the year.
Would you like help and advice on this or any other issue?
Contact us straight away by telephoning 01932 564098 or email us using our ‘Contact Us’ page.
This note was published from our Winter 2018 Tax Briefing dated December 2018
Please be aware that the information above may have changed in subsequent months.
This note is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or for taking professional advice.