Yesterday I attended a webinar organised by HMRC for tax agents. The topic was "Income from property - minimising risks for individuals".
In this it was mentioned that you could not claim the standard 45p per mile for travel. Instead, you have to apportion the total running costs for the car.
I was not aware of this. Does anyone know if this is correct and if so, where it is mentioned in the legislation?
Replies (7)
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It's not where it is mentioned in the legislation
It is where it is not mentioned. The mileage rate is introduced in relation to trades (including professions and vocations) in ITTOIA 2005, s. 94D to 94E.
For property business a number of the trade profit calculation provisions are imported for the purposes of calculating the profits of property businesses by s. 272, but s. 94D to 94E are not among them.
HMRC are technically correct. In practice though, you may find them accepting claims, despite what they have said at the webinar you attended.
Rented property expenses
Yes, yesterday's HMRC webinar was the first time I was aware that the 45p per mile mileage expense did not apply. PIM 2210 sets this out. All my searches online show that the contributors expect the 45p/25p to apply. Strange? Do we have to rely on an HMRC "concession"? I note Steve Kesby's use of the word "may".
You have to rely...
... on HMRC being prepared to accept that the amount calculated on the mileage basis does not substantially differ to that which would be calculated using an apportionment of actual expenditure.
There is no statutory support for claiming the mileage basis for a property business.
Does that mean
We can use the AA rates?
Up to 5,000 miles for a car costing over £32k appears to be £2.117 per mile..
Real cost
HMRC used to accept AA or RAC rates a long time ago before the Fixed Profit Car Scheme came in. They are not accepted now as any better indicator than the official AM rates so you may well have to resort to reality.
Total costs times actual rental mileage compared to total mileage
I remember having a discussion with Steve K on this subject a few years ago.
My personal view is that HMRC are unlikely to challenge any reasonable mileage claim.
Terra Firma
My personal view is that HMRC are unlikely to challenge any reasonable mileage claim.
They abandoned extra statutory concessions, but not 'blind eyes'.
I like it, but the terra doesn't seem too firma.
(any chance of a reasonable fridge claim)