A taxi driver uses his vehicle for business and then personal usage as well.
The expenses incurred on the business side are as below:
Road Tax
Depreciation
Vehicle plate licence
fuel
Insurance
Vehicle Service+Repairs etc
How best to account for the private (non business) use of the vehicle please?
Thanks
Replies (10)
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Sole trader?
Identify the proportion of personal usage and add it back in the tax calculation.
If you are still stuck, then what is it that you are stuck on?
No it isn't
One step at a time. We might winkle out the mileage in due course.
Anyway, I thought you weren't playing.
If you are satisfied that 10% is the right private use percentage you restrict the capital allowances on the vehicle by 10% and you add back 10% of the motor expenses.
If you want to open an argument with HMRC that you should only add back the incremental cost of the car being used personally, you are likely to be met with an argument that client should only get relief for the incremental cost of the car being used in the business.
Much easier to let sleeping dogs lie and adopt the conventional approach.
Suggest:
That you tell him to keep a mileage log. HMRC find it easy to attack taxi drivers.
If your client is unlucky and has questions asked you may regret using 10%.
If they ask for documents with mileage recordings and your client has done 100K in the year they are going to be looking for income from 90K.