Sole trader - vehicle expenses
Discussion
I'm trying to help a mate work out his tax liabilities and I'm having a brain fart regarding his vehicle situation:
He's a self-employed one-man-band sole trader.
He rents a Transit for £400/month. It's fully maintained and includes insurance.
The only thing he pays for is the diesel he uses, he does around 25,000 miles a year.
When working out his allowable expenses to offset against his income is he allowed to claim;
a) £400/month AND 45p/mile for the first 10,000 miles, 25p/mile thereafter;
b) £400/month AND some other lower figure per mile (which is what?);
c) something else?
Thanks.
He's a self-employed one-man-band sole trader.
He rents a Transit for £400/month. It's fully maintained and includes insurance.
The only thing he pays for is the diesel he uses, he does around 25,000 miles a year.
When working out his allowable expenses to offset against his income is he allowed to claim;
a) £400/month AND 45p/mile for the first 10,000 miles, 25p/mile thereafter;
b) £400/month AND some other lower figure per mile (which is what?);
c) something else?
Thanks.
Not LTD? Easier to explain if LTD and not self employed.
Either the business pays him a tax free 45p/25p a mile for 10000/15000 miles and nothing else.
Or the business pays the rental/lease/repairs/fuel at cost/jet wash costs and nothing else.
Let's assume he ONLY uses it for work and any personal use is incidental.
Otherwise his personal use is the equivalent of £3000 income. Taxed at whatever rate he pays.
Either the business pays him a tax free 45p/25p a mile for 10000/15000 miles and nothing else.
Or the business pays the rental/lease/repairs/fuel at cost/jet wash costs and nothing else.
Let's assume he ONLY uses it for work and any personal use is incidental.
Otherwise his personal use is the equivalent of £3000 income. Taxed at whatever rate he pays.
QuartzDad said:
He's a self-employed one-man-band sole trader.
As was I.My vehicle (a normal car) was owned not rented, but I simply added up all my motoring expenses and put 75% of them through the books. 'Private car used for business' was the angle, the other 25% being private use. Very easy.
If your friend has another vehicle for private use then I guess he could make the figure 100%.
IIRC from the advice my accountant provided the 45p a mile is to provide and run the vehicle.
If he claims the £400 then he as an individual is being provided with a vehicle which opens up the NI Contribution hole. He also can't then claim the 45p a mile but only the fuel only rate.
He should pay for an hour with an accountant.
If he claims the £400 then he as an individual is being provided with a vehicle which opens up the NI Contribution hole. He also can't then claim the 45p a mile but only the fuel only rate.
He should pay for an hour with an accountant.
He is renting a van for his business.
He should claim the cost of rental.
Any other running costs of the vehicle - fuel, insurance, repairs etc THAT HE HAS TO PAY, he should claim as well.
As you claim the van is 100% for business use, then there is no need to apportion these costs. The van is 100% for business so the associated costs HE INCURS in keeping the van roadworthy and running are allowable.
He DOES need to ensure he keeps adequate records of all the invoices and receipts he receives in respect of the vehicle.
He should claim the cost of rental.
Any other running costs of the vehicle - fuel, insurance, repairs etc THAT HE HAS TO PAY, he should claim as well.
As you claim the van is 100% for business use, then there is no need to apportion these costs. The van is 100% for business so the associated costs HE INCURS in keeping the van roadworthy and running are allowable.
He DOES need to ensure he keeps adequate records of all the invoices and receipts he receives in respect of the vehicle.
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