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Mileage Allowance for Self Employed

He is a self employed project manager. His petrol bills came to about £4,500.
With other Vehicle running expenses and capital allowance, the total should come to £6000.
However,I'm a little concern about claiming Mileage Allowance as this figure will come to about £10.600.

Client's Turnover is about £35,000. Would claiming the mileage allowance be raising the Revenue's attention?
Please, I require your assistance urgently. Thank you



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26th Jan 2007 13:29

Mileage Allowance correct?
Employees should claim mileage allowance at approved rates LESS any reimbursed by employer - but for self employed surely claim ONLY actual costs incurred (ALL) - but disallow private proportion which should be justified by log of business journeys.

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By frauke
26th Jan 2007 17:37

Mileage allowance
James B is correct - but you can switch once - but not a second time/back!

I had a client who gave me lists of what he spent on his car, but no receipts. I got fed up with it and switched him to the mileage allowance as I was able to get a record of every business trip he did quite easily! Its amazing what you can get if you ask enough questions.

Ironically he was investigated just as I was finalising his first tax return using this basis. When I mentioned I had switched to the Tax inspector - he told me that it was a good idea. No receipts did cause a lot of problems, but by using the MOT certificates (which the client managed to produce), and establishing the "private use" part - the Inspector eventually conceeded.

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By Anonymous
26th Jan 2007 22:03

Sorry Frauke.....
... but my reading of IR222 is that you can change as many times as you like so long as its on a change of vehicle. Why should a taxpayer get only one chance to change?

It doesn't say that anywhere in the notes - except for when you exceed the VAT turnover figure, when, on the next change of vehicle you are required to use 'actual' proportions. Under the VAT threshold it seems you can go from one to the other on change of vehicle depending on what's most beneficial.

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By Anonymous
26th Jan 2007 14:06

Claim it but.....
.... what was claimed last year? You can't swap between actual expenditure and AMAP rates when you feel like it - only on a change of vehicle (see IR Helpsheet 222 page 2). If AMAP rates were claimed last year, you must claim on the same basis this year. If CAs and ppn of expenses last year - then its the same this year.

If AMAP rates are claimable (because of the above) then include the full claim, but note in white space the fact you are doing so, and confirm a mileage log is available (presuimng it is).

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By frauke
25th Jan 2007 16:58

36,000 miles
He must spend all his time driving on motorways!

Working 52 weeks a year hes doing nearly 700 miles a week. (Is he really working 52 weeks a year?

At an average 30 miles per hour, (5 days a week) thats over 4.6 hours a day driving. If he's managing to average more miles per hour, its not so bad - but having once done the exercise of driving from SW17 in South London to Ilford in Essex, on the most direct route AT NIGHT, I averaged 11 miles per hour. Traffic lights really slow you down!

If he's really doing the miles (as he can substantiate it) - claim it.


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25th Jan 2007 19:58

My all means claim it. It will trigger flags at the Revenue end, particularly if there wasn't as substantial a claim last year. So you might want to put a white space note in to explain. But I;m sure he'll have repair bills or MOTs to prove it.

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