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When you’re self-employed and have to drive as part of your job, you can claim back money for the miles you’ve covered for work, also known as your business mileage, during each tax year. This doesn’t include your regular commute. As a food delivery rider or courier or even if you just have to travel for meetings, you can claim this flat rate allowance.
Claim if you drive any of the following vehicles:
You can calculate your vehicle’s expenses using a flat rate for mileage which is a method known as simplified expenses. It’s good to note that you cannot use simplified expenses in conjunction with any other allowance – you’ll have to choose one of the other.
Here are the HMRC mileage rates you can claim at:
|Vehicle||Flat rate per mile|
|Cars and vans first 10,000 miles||45p per mile|
|Cars and vans after 10,000 miles||25p per mile|
|Motorcycles||24p per mile|
|Bicycles||20p per mile|
To use our calculator, just input the type of vehicle and the business miles you’ve travelled in it for work. Don’t worry if you use multiple vehicles. Calculate them individually and then add them together – we’ll let you know what you can claim for each.
The Mileage Allowance is a tax-free allowance that you can claim if you use your car for business. Whether you’re self-employed or not, you can claim tax relief back for some of the time you’ve spent on the road.
Once you’ve worked out what you can claim, you can claim it via a Self Assessment tax return. You file a tax return to declare any untaxed income to HMRC. You pay tax with this method when you’re self-employed, if you earn money from renting out property, and for many other reasons.
There are a few questions that you should ask yourself to work out whether you can or should claim the HMRC Mileage Allowance. We say should because if you, for instance, bought the car you’re using specifically to use for work, you can’t claim the cost of the vehicle using this allowance. It’s more cost-effective for you to claim what’s known as Capital Allowances instead.
Capital Allowances are a tax relief that you can use on larger work purchases such as a vehicle, equipment and research and development (R&D) costs.
As a sole trader, you have to claim your capital allowances within 12 months of the 31st January tax return deadline. Like we mentioned above, to claim this allowance, you’ll have to file a Self Assessment tax return to HMRC. Read more about Capital Allowances on our Taxopedia.
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