Tax return & car expenses

[ataylor0510]

Help! I'm about to tackle my first tax return as only been self-employed for a year......So far all i've got is a record of all my customers with my daily income, outgoings and i've kept all my receipts. I thought i was being very organised until a friend said i was supposed to work out the mileage every time i visit a client instead of claiming most of my petrol, I was wandering what everyone did in regards to keeping their records up to date and what and how much you can claim for car expenses such as maintenance and petrol?????? Sorry lots of questions!!x

 

[Dolly6410]

ahhhh i didnt know that! i'm also doing my first tax return this year, i'm so unorganised, i've kept everything but not written it down in a book yet... oops... i thought i was doing so well!!! is it true they dont have to be in till january next year? x

 

[Fuzion]

You dont necessarily have to claim mileage, this is the first year I've done it that way, as had max depreciation on my car, but as of next week shiney new car and I'll be claiming interest on my loan, petrol, wear and tear, etc. Maybe ring the tax office to see what is better for you.

 

[ataylor0510]

It doesnt have to be in until january but its probably going to take me a few months to get my head round it!!
Are you claiming only a percentage and if so how much?

 

[SJK]

You can either claim 40p per mile for the exact business mileage you did or you can claim a percentage. To work out a percentage:

Work out how many miles you did in your car in total
Work out how many miles you did for business
Divide the second figure by the first figure and multiply by 100. This will give you the percentage figure you will use.

You can then claim that percentage of any car cost - for instance petrol, servicing, insurance, MOT etc etc.

You can also claim depreciation on your car.

Unfortunately, it's absolutely essential to know how many business miles you've done in your car - as you can see.

 

[nicolaluise]

I'm in the same boat ... Done everything bar mileage oh well I'll just have to sit down and work it all out!!!

 

[charlenejohnson]

As an accountant turned beautician/hair extension technician, please let me stress how importnat it is to keep on top of your paperwork. i know we all say we will do it at the end of the week, end of the month, then next thing you know, it's return time! i calculate my business mileage on a daily basis as well as my profit, so i know exactly where i stand. it takes me around 15 minutes to do every day and i make sure i do it even if it"s 10 o'clock at night. doing your calculations daily/weekly will reduce the possibility of making errors. if you need to know anything just send me a pm, or there are helplines for sole traders and ltd companies alike that will be able to provide you with more information x x sherry

 

[Fuzion]

It's now 45p per mile, at last fuel increase has been recognised!

 

[Pinkbunny28]

How on earth do you work out depreciation on your car? Can do the rest but this ones got me completely stumped lol any help would be great! x

 

[SJK]

Depreciation on a car is 20% writing down allowance. To work it out, I'll give an example.

You need to have the value of your car at the start of business. If we say this is £10,000, for the first year, you would take 20% of that as an expense - £2,000 - BUT this would be pro-rata'd for the amount of business use, so if you use it for 50% business, you would take £1,000 as the expense.

Note - you work your percentage out on the mileage you have done, see my post above.

The next year, you would take the value, minus the original total depreciation and take the allowance less the proportion.

So, £10,000 minus £2,000 equals £8,000. 20% of this is £1,600 and then 50% of that is £800 and so on.

 

[Pinkbunny28]

Very helpful thank you! x

 

[Pooh8bear]

I just give it all to my bookkeeper and let her do all the work

 

[Fuzion]

Be warned Geeks in your first year trading you'll get a bill for the year you've just done and in advance half of next years projected earnings! Be warned could be costly! Ouch!

 

[lee7smith]

I started my business in January and have only been putting in petrol receipts, is this wrong then ?
I use the car for work 95% and If we do a big journey in it, I just refill the tank from my personal account ! All this car stuff is confusing , best get myself into gear ! :/