First tax return

[sargefit]

Hi guys,

I am in my first year of self employment and doing my first tax return and have a quick question.

We brought a car that we share I use it for business and for taking the wife to work etc. I guess about 75% of its use is for my work, travelling to clients etc. I have kept a log of all business milage which I am aware I can claim at 40p per mile. Can I claim anything on the capital gains side of things.

Many thanks for your help.

Mark

 

[MyAccountantOnline]

Hi guys,

I am in my first year of self employment and doing my first tax return and have a quick question.

We brought a car that we share I use it for business and for taking the wife to work etc. I guess about 75% of its use is for my work, travelling to clients etc. I have kept a log of all business milage which I am aware I can claim at 40p per mile. Can I claim anything on the capital gains side of things.

Many thanks for your help.

Mark

Hi Mark - when you ask if you can claim anything for 'Capital Gains' have you made any capital disposals, or are you perhaps confusing this with Capital allowances?

 

[sargefit]

Hi Mark - when you ask if you can claim anything for 'Capital Gains' have you made any capital disposals, or are you perhaps confusing this with Capital allowances?

I am indeed confusing it with capital allowances.

Boy, I must be confused today.

 

[David Griffiths]

If you claim the 40p a mile then that covers all vehicle costs -fuel, tax, insurance, maintenance, depreciation - so no you can't claim anything else.

You can only claim on the 40p per mile basis if your turnover is below £68,000.

As it's your first return, you could do the sums to see if it's worth claiming 75% of costs, in which case a capital allowance (not capital gain ) is available. However, once you've settled on which way you want to claim you can't chop and change each year- you have to stick with it until you change vehicles.

If you've got accurate mileage records - which you should keep whichever method you choose - and know the annual total mileage, calculating the business proportion is easy.

 

[elaine@cheapaccounting]

the notes to the SA103 have the details on how to do this plus an example of capital allowances:


http://www.hmrc.gov.uk/worksheets/sa103f-notes.pdf

 

[SussexHazel]

Hi Mark

If you claim 40p per business mile for the use of your car, this effectively covers petrol, car tax, servicing, repairs and depreciation.

Alternatively you could claim all of your car expenses through the business and then disallow the 25% private element. You would then also be able to claim capital allowances on the vehicle (the tax equivalent of depreciation). Again you would disclaim the private proportion.

 

[DickM]

Hi guys,

I am in my first year of self employment and doing my first tax return and have a quick question.

We brought a car that we share I use it for business and for taking the wife to work etc. I guess about 75% of its use is for my work, travelling to clients etc. I have kept a log of all business milage which I am aware I can claim at 40p per mile. Can I claim anything on the capital gains side of things.

Many thanks for your help.

Mark

Below are rates for all vehicles and mileage bands:

The amounts to use are:​

• car or van 40 pence a mile for the first 10,000 miles
25 pence a mile thereafter
• motorcycle 24 pence a mile​

• cycle 20 pence a mile.

found @ this link:
http://www.hmrc.gov.uk/helpsheets/hs222.pdf#page=3


One can even get 20p/mile for a bicycle, no wonder window cleaners are always smiling ............ not in this weather though brrrrrrrr!

 

[sargefit]

Thanks for the replies guys. The maths say it will work out cheaper in the long run to claim the milage rate rather than the capital allowance on the vehicle.

Now if only I could apply that rate to the £3000 worth of courses I paid for to get qualified.

 

[gillyfleur]

Hi Mark

If you claim 40p per business mile for the use of your car, this effectively covers petrol, car tax, servicing, repairs and depreciation.

Alternatively you could claim all of your car expenses through the business and then disallow the 25% private element. You would then also be able to claim capital allowances on the vehicle (the tax equivalent of depreciation). Again you would disclaim the private proportion.

Is this 25% private element a fixed amount laid down by HMRC? I've always been led to believe (by people far more knowledgable than me who do tax returns day in day out) that any add back for private use can be at whatever percentage relates to private use that you choose - and that HMRC look more towards 75% private, 25% business than the other way around - unless these days you can prove differently with mileage logs ? Is this not correct ? Many thanks

 

[elaine@cheapaccounting]

Is this 25% private element a fixed amount laid down by HMRC? I've always been led to believe (by people far more knowledgable than me who do tax returns day in day out) that any add back for private use can be at whatever percentage relates to private use that you choose - and that HMRC look more towards 75% private, 25% business than the other way around - unless these days you can prove differently with mileage logs ? Is this not correct ? Many thanks

The private proportion is based upon the % of your private trip out of the total mileage. A mileage is the key

 

[SussexHazel]

You use whatever percentage is appropriate to your circumstances. You should maintain a business mileage log to support the percentage used.

 

[SussexHazel]

The 25% mentioned in my earlier post was the private mileage % mentioned in the OP

 

[SussexHazel]

Is this 25% private element a fixed amount laid down by HMRC? I've always been led to believe (by people far more knowledgable than me who do tax returns day in day out) that any add back for private use can be at whatever percentage relates to private use that you choose - and that HMRC look more towards 75% private, 25% business than the other way around - unless these days you can prove differently with mileage logs ? Is this not correct ? Many thanks

The 25% referred to Mark's private mileage in his OP