Our research shows that 95% of sole traders don’t keep records of journeys, which means they have to claim for petrol rather than mileage.

When you claim for petrol, you have to split the bill between business and personal use. Thus, you could lose out if you do a great deal of driving for business purposes, because you can’t claim the correct VAT and you can’t offset your income against the higher amount. This means you pay more VAT and more income tax.

If you struggle with keeping records of your journeys, try an app like MileIQ or Triplog which uses your phones internal GPS to automatically record your journeys without you lifting a finger!

There are TWO ways to claim for business vehicle travel:

  1. Actual costs

You can claim allowable business expenses for:

  • vehicle insurance
  • repairs and servicing
  • fuel
  • parking
  • hire charges
  • vehicle licence fees
  • breakdown cover
  • train, bus, air and taxi fares
  • hotel rooms
  • meals on overnight business trips

You can’t claim for:

  • non-business driving or travel costs
  • fines
  • travel between home and work

2. Flat Rate

You may be able to calculate your car, van or motorcycle expenses using a flat rate (known as simplified expenses) for mileage instead of the actual costs of buying and running your vehicle. For Cars, this works out at £0.45/ Mile travelled on business up to 10,000 miles in the Fiscal year and then £0.25/ Mile thereafter.

If you travel as a passenger for business, you can even claim £0.05/ Mile or if you cycle to see clients, then that’s £0.20/ Mile too! – Read more on this here

If you opt for using the Flat Rate method, then you should keep a record of your business journeys and you don’t have to use flat rates for all your vehicles; however, once you use the flat rates for a vehicle, you must continue to do so as long as you use that vehicle for your business.

Call LeeP for more tips and guidance on keeping good records for your business.

01733 699033 or email Polly@leepfinancial.co.uk