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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4426
Experience:  FCCA FCMA CGMA ACIS
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As the majority of expenses incurred are motor car costs how

Customer Question

As the majority of expenses incurred are motor car costs how does the taxman expect the calculation to be done?.Is there a cost per mile based on the size of the engine, or the amount of petrol used, or some other method?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
, I'm Keith and happy to help you with your question.
Indeed there is, you may charge 45p per mile, this is rough and ready twist of the spoon to stop the treacle running off so to speak. The rate is computed to cover running and capital costs of a motor vehicle. This 45p is first 10000 miles of business mileage in each tax year and drops to 25p per mile over that level. Remember you cannot claim commuting between your places of residence and your work location.
If you are employed then this is the only method you may use. If your employer reimburses you at a lower rate then you may claim the difference between that rate and 45p on your annual self assessment tax return.
If you are self employed you could claim actual expenses using a combination of capital allowances [purchase costs of the vehicle] and expenditure [running costs; fuel, repairs, road fund tax etc], but the process is so cumbersome and the record keeping required so onerous that almost nobody bothers with this method.
I do hope I have assisted you with your question.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you support.