If you use a vehicle for your business then you can claim back your costs in a couple of different ways:
Claiming vehicle costs
Firstly you may choose to claim back the running costs of the vehicle (fuel, insurance, maintenance) plus capital allowances (you can’t claim the actual payments for your car, but you can claim a percentage of the cost each year). If you use the vehicle entirely for business use then this way is often the easiest to record.
The alternative method would be to claim mileage allowance. If you use this method then you can’t claim the costs mentioned above. You simply keep a record of all mileage that is done for business use only. The first 10,000 miles is claimed at 45p per mile, any additional mileage is claimed at 25p per mile.
E.g. 8000 miles would be 8000 x .45p = £3600
E.g. 22000 miles would be (10000 x .45p = £4500) + (12000 x .25p = £3000) = £7500
The mileage method is often the best method if you use your vehicle for a mix of business and personal use. Once you have selected a method you must keep to the same method for the lifetime of the vehicle within your business. So if you start claiming mileage, you can’t swap to changing costs for that vehicle.
If you’d like to discuss which method is best for your business needs then please give me a call on 01782 906001 – Dave Shannon