I am computing accounts for a 20 year period for a client. Client was self employed earning £5k commission per annum, HMRC have discovered the earnings and enquiry is in progress. Income and expenditure accounts for the period have been requested.
In relation to motoring costs (fuel, tax, insurance, repairs/servicing and capital allowances), is it correct that by agreeing a claim for AMAP rates with the Inspector at 45p / 40p per mile based on agreed level of business mileage that this expense will effectively include all motoring costs AND capital allowances for the vehicle?
Would it be more tax effective (but not more time effective obviously!) to compute fuel prices for each year and calculate based on fuel costs based on engine/fuel type, and then also claim tax deduction for motor tax, insurance, repairs and capital allowances?
My main issue with not using AMAP rates is that the client really won't know the vehicle in use for the last 20 years! So AMAP would be easier to compute.