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Ask Adam Hunt Your Own Question
Adam Hunt
Adam Hunt, Accountant
Category: Tax
Satisfied Customers: 451
Experience:  FCCA, FFA, FFTA
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I recently became self-employed. I am clocking all my miles

Customer Question

Hi, I recently became self-employed. I am clocking all my miles and was looking into mileage claim. So far I have done 1000 miles which is equal to £450. However, when I compare my predicted tax for Self employed it works out that I only really get back around 20% of that £450. My questions is: do I claim that £450 from my tax due or is that £450 simply tax free? The reason for me asking this is that I will be doing over 10000 miles a year so having only 20% of the running cost back can be slightly concerning.
Assistant: Are you filing as a sole proprietor or independent contractor?
Customer: Sole trader
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: No
Submitted: 6 months ago.
Category: Tax
Expert:  Adam Hunt replied 6 months ago.

Hi I am one of the experts. If you have got proper evidence to prove that you have done these 10,000 miles lets say for business purpose then 45p allowance is allowed so you should put travel expense as £4500.

Hope I have answered your question?

Customer: replied 6 months ago.
Hi Adam. Would that come out of my Tax to be paid or go as Business expense ie just show reduced income? My question is really would that be considered as tax free outgoings? I've tried to predict my tax for eg 40000 income. It would be around 13k in taxes. If I did those 10k miles it would work out as 4.5k allowance. Would that tax become 8.5k then or I just pay tax on 35.5k income? (40k - allowance). Sorry for this. I am very confused with it.
Expert:  Adam Hunt replied 6 months ago.

This mileage allowance should go as Expenses in your books. For first 10k miles you have got 45p per mile and afterwards rate is only 25p per mile. Is that now understandable?