I have a client who always buys low emission cars and wishes to claim 100% Capital Allowances (AIA for 2009/10) However, he also wishes to claim mileage. Can someone just re-assure me that he cannot do that and that he has to claim actual business use of bog standard motor expenses and AIA OR mileage.
Thank you for your help!
Jo
Replies (5)
Please login or register to join the discussion.
Yes
Hi Jo - yes it's either/or.
The mileage rate incorporates an element for vehicle depreciation and the only extra thing you can claim, over & above the mileage rate, is any finance charges to buy the car.
Couple of extra things, the capital allowances relevant to low emission cars are First Year Allowances @ 100% not AIA. Know it actually makes no difference to the sum but best get it right.
Assuming your client is self employed you can only claim the mileage allowance if the business turnover is < the VAT registration threshold, when the car is bought. So if it's more he claims the business proportion of the running costs and FYA.
Be reassured!
I assume you mean he wants to claim the approved pence per mile rate when you say he wants to claim mileage. In which case you are right - see here:
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47701.htm
where it says:
Capital allowances
If a taxpayer uses the mileage rate basis then they cannot claim capital allowances in addition. This is because the payment rates already contain an element to allow for depreciation.
So, as you say, it's either the approved rate or AIA plus actual running costs.
Cathy