In case you are running a business as a self-employed individual and you own a vehicle, the vehicle is also used for business purposes, the chances are that your motor expenses can be claimed. This is to handle well in order to reduce your tax bills. However, to pursue the dream of reducing your tax bills, you have to learn to claim mileage for work first.
It is considered a bit complicated to claim for your motor expenses in comparison to other business expenses. The reason behind this complexity is that most likely your vehicle is being used for business purposes as well as for your personal use. This makes it hard for you to collect the receipt in an official way to submit and get them approved. This will also hinder setting the receipts off against your business profits. This guide has covered you and we have explained how can you claim your motor expenses and how can you make a record of your business mileage.
How To Claim Motor Expenses?
Normally there are two ways considered when it comes to claiming your motor expenses. They are listed below:
- The vehicle is used for business purposes. Calculate the usage and make a claim.
- Calculate your business mileage and make a claim for it.
In the opinion of the experts, calculating the business mileage and making a claim is found easier and simple method for several people. However, it is hard to keep a track of its record. It is recommended to keep a record both ways for beginners or first-timers. This will help you to choose the method you find the most convenient.
Business Usage and Travel
It is not right to consider every mile that you have travelled for business purposes as a business mile. In case you are driving to your regular places for work then this will not come in the count of business travel. This will be considered your own commute. The regular places must be excluded from your business percentage. One such example is the retail unit or office that you use to work. Even when you pay a visit to your contractor or the office for whom you work as a freelancer is excluded from the list.
Let’s talk about what is classed as business usage. When you travel for a meeting with your client, it is classed as a business mile. Some other examples include the following:
- When you travel to some temporary place for the purpose of work.
- When you travel to attend training or courses in business.
- When you travel to buy stocks.
You will realise that when you exclude the commute miles from your total miles, there are very few moles left that you travelled for business purposes.
Get in touch with one of our experts for instant help if you want to learn about calculating your business mileage. We will love to help you with the best possible solutions. Call us on 02086868876 or email us today.
Learn to Record Mileage for Work
If you aim to use the method of calculating mileage to make a claim on motor expenses, it is recommended to maintain a mileage log for this cause. This will help you to make a claim. If someone asks you for the relevant details like HMRC requires, you can easily provide the details. The method you want to choose for the record of your business mileage is totally your choice.
There are several simple methods and steps to maintain the records. This includes the following:
- A manual log to keep all the details of your journeys recorded.
- Record the postcodes.
- The distance between the postcodes is also recommended to be recorded.
- There are certain apps that can help you maintain the record if you are more like a tech-savvy person.
- Use the GPS of your mobile phone to keep an easy track of your business journeys.
Claim Business Usage of Your Vehicle
The famous and simple method to keep a record of the business mileage is to consider the overall business usage of your vehicle. For this method, you will have to calculate the overall mileage and then the business mileage of your car. This method is considered a bit complicated. The business will tend to pay for all the motor expenses including:
- Repairs and services
Moreover, this depends on your choice whether you want to enter the full amount of expenses of the vehicle or just the business expenses. For this processing, you need to clearly understand the difference between allowable expenses and disallowable expenses. There is no escape from the personal usage and expenses as you will only get tax relief on the business expenses.
The Bottom Line
We can sum up the discussion as you have gathered a fair amount of information about how to claim mileage for work. It is suggested that you make notes about the method and details that explain how did you choose the business percentage. These details can be required by HMRC or anyone related to the industry. This can be reviewed annually as well to ensure seamless processing and an accurate business percentage. We hope this guide will help you to choose the suitable method and make the accurate calculations to make a claim.
Disclaimer: The information about how to claim mileage for work provided in this blog is general in nature. It does not intend to disregard any of the professional advice.