Motoring expenses - private use calculation

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What would HMRC deem an acceptable approach to calculating the private usage for motoring costs? I have a start up client who has kept a record of his mileage to visit client sites. This could be used for simplified flat rate method. However I would like to calculate actual costs to see if this would be more advantageous. He does not have a record of what his odometer was at the date he commenced business, but he does have MOT records showing mileage at the date of MOT (two months pre commencement of business) which could be used to estimate a monthly average mileage, which could then be used to determine and approximate business v private proportion. Would HMRC deem this to be an acceptable method of calculation or do they really require very specific mileage records showing every personal and business trip?

 

Many thanks

Replies (7)

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RLI
By lionofludesch
24th Oct 2017 10:46

The only time I've had private motoring challenged was for a taxi driver.

And that was HMRC saying it was too high!!

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By The Accountant
24th Oct 2017 10:48

HMRC will accept a percentage of costs for Private Use. Work out as best as possible your client's use of the vehicle for work and personal use, utilising the information that you have. Ask your client if he thinks that is reasonable and fair and apply that as a percentage to all his motoring expenses of that vehicle. Remember to use the same percentage when claiming Capital Allowances. Check back with your client each year to make sure the percentage is still correct.

Thanks (1)
By Duggimon
24th Oct 2017 12:01

I don't see any issue with using total miles less business miles to work out the private use percentage, no need to log personal trips.

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Replying to Duggimon:
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By andy.partridge
27th Oct 2017 11:55

True enough, but in the OP's case the client doesn't know what the total miles were.

I think the best you can do is take the MOT reading as a base, get the odometer reading 'now' and assume a time-based apportionment of the difference to the year-end.

You could adjust for any extraordinary mileage, such as a 2 week holiday touring the UK etc. that might skew the result.

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By Michael Davies
27th Oct 2017 11:32

Tell him he is a star for keeping a diary !

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Morph
By kevinringer
27th Oct 2017 14:47

I only have a handful of clients who record business journeys. 99% of my clients have no records at all. I ask the client to give me an estimate of annual business mileage and annual private mileage. If the total agrees with annual mileage at https://www.gov.uk/check-mot-history then I go along with what the client says. If clients have no idea of the business/private split then we work through a sample week and extrapolate. But they're all estimates at the end of the day. I've never known HMRC to challenge anything that appears to be reasonable.

Thanks (1)
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By Pygmy
30th Oct 2017 12:34

I had one sole-trader client who proposed to claim more business miles for one year than were shown on the odometer of his car. LOL!

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