Vehicle Expenses

If you use a vehicle for your business, you can claim expenses based either on business mileage or on actual costs. In both cases, if the vehicle is used for both business & personal travel, you will need to track & log business mileage.

Actual Costs

When claiming actual expenses for vehicles there will many costs / records of expenditure paid over the year especially for fuel. The easiest way of dealing with the business use / personal use split is to record all expenses through the year and then at year end work out your business mileage from the records you have kept on your business mileage and the total annual mileage:-

15,000 business miles / 20,000 total miles x 100 = 75% business use

So if total vehicle expenses at year end are £2,000 you can claim 75% of this as a business expense which is £1,500. £500 is a disallowed personal expense.

You can claim the purchase price of most vehicles as an expense (see note below about cars). Example:-

  • Work van purchased for £6,000 business use 80% and 20% personal use – you can claim £4,800 as an expense

For more details on capital expenditure i.e. disposals & change of business / personal use see previous post.

Note: You cannot claim as an expense vehicles which are classed as cars – you have to use the capital allowance system or use simplified expenses instead

Simplified Expenses

You can claim a flat rate based on your business mileage instead of claiming actual vehicle expenses.

There is more on simplified expenses in the next post.

Vehicle Expenses
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