Tax allowances: a question about claiming mileage as a self employed person?

Question

Can I change from the simple method to the exact method half way through a tax year?

For two months I have kept details of business mileage but thats all, intending to use the simple method to claim mileage at the normal rate. But it has become apparent that the simple method won't compensate for the costs incurred over the year (a complete new exhaust, tyres, brake disks and calipers has just set me back £760 for example).

So I don't have the records to do the whole period using the exact method. Can I do the first two months using the simple method, and the rest with the exact method?

Answer 1

You keep all of your petrol receipts, keep a record for each vehicle for the number of miles travelled on business. Every time you replace anything on the vehicle,repairs, polish to clean it ,M.O.T. Tax, insurance keep the receipts. Everything you spend on it gets tax relief, it`s called "expenses".also, you get a set amount each year "depreciation" against tax. Don`t use the `mileage` method, you are better off if you do the above. Your accountant should have told you all this. You DO have an accountant don`t you? If not get one, what you pay him in fees, will be more than covered by the amount he will save you, in income tax. You can change your business method, during the tax year, but you will have to end your `tax year` and start a new `tax year. Lots of S/Emp. people split their tax year in two parts.

Answer 2

Not really one or the other I'm afraid.

You either need to claim the expense as the flat rate charge of 40p a mile or have been keeping details of your petrol, services etc from 6th April 2006.

You can't go swapping to and fro taking the one that seems most advantageous at the time.

If you want to use the exact method remember you need to start in April 2007 & have all your receipts and a detailed account of what is business and what is private mileage to apportion the claim.

It is a lot more work than the fixed mileage rate alternative.

Answer 3

No you cannot claim mileage. The company that provides the taxi charges you for the use - that charge you put down as an expense. You are making one payment for the use of the vehicle - they supply the vehicle and the fuel, you can only claim mileage if you incur a cost. Simple tax return (and if it's 11/12 the £100 penalty has been posted to your account), you report total receipts from the meter and total payment to the cab comapny - the difference is your profit.

Answer 4

As ex-self employed you do not do it that way.
You charge the depreciation of the vehicle and all running expenses such as tax, insurance, maintenance and fuel to your Income Tax return.
If you use the vehicle privately you do a pro rata charge on these items dependant on mileage for each use.
Roy S

Answer 5

Not sure what you mean but until the tax return is due you can do what you like. When you make your return then it must all be in the same format.