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Business Mileage for a Soul Trader/Freelancer

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Deleted member 141014

Hello there,

I understand the current rates for mileage being 45p per mile up to 10,000 then 25p per mile after which can be claimed back off your tax return at the end of the year.

My problem is I don't know how much to account for mileage being a Soul trader/freelancer in television. Currently I don't do much driving in my own vehicle while at work, although I am constantly driving to a variety of locations at the start and end of each day.

As I understand it I cannot claim mileage when I am commuting which I suppose this could be considered as, although i don't have a set/fixed place of work.

Therefore can I claim business mileage from home(where my office is based) to and from the variety of locations that I go to?

Any help would be greatly appreciated.

Regards

Alex
 
As I understand it, the 45p/25p allowance is for employees... If you are self employed you can charge the company you are invoicing what you want for travelling... whether they agree to pay it or not is another matter...

I used to pay engineers to come to my work about £60/hour travelling BOTH WAYS...

If I didn't pay it, they didn't fix my machines...

HTH

Pete
 
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You can charge what you want for mileage if you're self employed, you just pay tax on whatever is over and above the actual cost.

The 45p mileage rate can be used by self employed who are below the VAT registration threshold.
 
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Hello again,

Thanks for your replies.

The next question that comes to mind is logging the miles.

I have currently been logging the miles to and from location but haven't been keeping a Log of my Mileage Counter on my Car.

Do I have to do this legally? Its much easier for me if i don't and can just keep details of the miles rather than my counter.


Regards

Alex
 
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Scalloway said:
You can charge what you want for mileage if you're self employed, you just pay tax on whatever is over and above the actual cost.

The 45p mileage rate can be used by self employed who are below the VAT registration threshold.
Click to expand...

Sorry as an accountant I have to point out that the this statement is not correct.

Mileage rates have nothing to to with VAT so don't worry about that element.

For the self-employed - If you use your personal vehicle for business mileage then you can claim this as a business expense. You should NOT do this above 45p. If you do it above 45p then the business owner will have to pay tax on the additional amount above the 45p rate. So if you do 10,000 miles and pay 55p you will need to pay the tax on 10p x 10,000.

Don't worry about your mileage counter, just keep a log of the miles and the dates and the location. Also keep your fuel receipts for back up.

Stephen Edwards ACCA - Qualified accountant
 
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"The VAT registration threshold is used here purely as a convenient limit whose real value is regularly reviewed;
this practice has no application to VAT accounting and does not affect existing VAT rules and practices."

Sorry Scalloway, it is not as black and white as I stated.

I accept I over simplified with my comment on VAT, but as the vast majority of small businesses fail to keep a detailed log of the pure business element (due to difficulties suggester by the OP) it is far easier, more practical and common for people to apply the 45p per mile no matter what your turnover limit.

It is the same idea as business owners stating that their private element is say 20% without any real supporting evidence (I have seen this done on many occasions and also seen HMRC accept such generalisations).
 
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There is guidance and there is guidance and there is what happens in practice.

Sometimes accountants need to remember who they are serving (their clients not HMRC).
 
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