For a sole trader, am i right in thinking that if for 2007/2008 if your turnover is less than £64000, you can use EITHER mileage rate or actual motoring costs ie repairs,petrol,capital allowances,?
Can you only switch system when you change the car?
Can you also claim interest on a loan to buy the car in both cases.?
If you are over £64000 in sales then you CANNOT use the mileage rate?
Many Thanks for any help given in confirming above
david
Replies (5)
Please login or register to join the discussion.
Not only but also
As well as loan interest, we also include parking, tolls and congestion charge costs on the grounds that none of these expenses are actually Motoring costs. In theory the AA's figure of 40p/mile is meant to cover running costs and not peripherals.
Well done, Clint
It seems that you have found an error in the Revenue SE manual
http://www.hmrc.gov.uk/manuals/senew/SE31335.htm
Where do we go from here?
HELP! has this changed, then?
IR222 says
"no other motoring expenses (other than interest on a loan used
to purchase the vehicle) are claimed and no capital allowances
are claimed on the vehicle (since AMAPs rates already contain
an element to allow for depreciation)".
http://www.hmrc.gov.uk/helpsheets/ir222.pdf
I would agree that finance costs are excluded in the case of employed individuals.
Phil
You're looking at employees, the original question and Clint's answer regarded self employed individuals. The treatment of loan interest differs between the two.
Your link is also to an out of date manual. The Employment Income Manual applies from 03/04 rather than the Sch E manual.