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Author: JW / / Latest News

Self Employed – Are you keeping a mileage log?

As for most businesses, you probably have a car or van on which you wish to claim tax relief for the capital cost and the expenses.

As you can only claim the business proportion of the expenses, are you keeping a mileage log to prove the business proportion?

If not then you should be.  This is the only way to defend the amount claimed on your tax return if you receive a query from HMRC.

Note also, even if you have a vehicle that is used 100% for business (often a van or commercial vehicle) you should still keep a log of your mileage, in order to prove that the expenses you are claiming are not excessive, for example you are not also including fuel for a private vehicle in your claim.

This latter point has come to light recently following an HMRC compliance check into a construction industry subcontractor client who only claims for a van and its expenses.

On this occasion we were able to agree the figures without a log, but it would have been much more straight forward if one had been kept.

At an absolute minimum we would suggest a diary to be retained with details of places worked/visited each day to give a reasonable idea of miles travelled for the business.

Whilst on the subject of business mileage note also that there have been several tribunal cases in the last 2 – 3 years which have gone HMRC’s way where expenses have been claimed for travel to a ‘regular’ place on the basis that the individual’s base of operations was ‘at home’ and hence he was travelling to a temporary workplace.

The tribunal did not like the idea that the individual chose to do only certain tasks at home hence the need for the other ‘regular’ workplace.

They therefore found for HMRC and disallowed the expenses for travel between the home and the other workplace, on the basis that the taxpayer wished to keep his home separate from his main business activities and that the travel was like any other commuting.

Therefore, if you have a place where you travel to on a regular basis, if you have previously treated this as business mileage, you should discuss the situation with us.

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