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Simplified expenses for motor vehicles

POSTED BY: Adam Walters

25 January 21

There are simplified arrangements in place for the self-employed (and some partnerships) to claim a fixed rate deduction for certain expenses where there is a mix of business and private use. The simplified expenses regime is not available to limited companies or business partnerships involving a limited company.

The fixed rate deduction can be used instead of working out the actual costs of buying and running your vehicle, e.g., insurance, repairs, servicing, fuel. The use of the simplified flat rates is entirely optional. However, once a decision is made to use the simplification for a specific vehicle this must continue to be used for a vehicle as long as that vehicle is used for business purposes.

Under simplified expenses, the following flat rates per mile available.

  • Cars and goods vehicles first 10,000 miles 45p
  • Cars and goods vehicles after 10,000 miles 25p
  • Motorcycles 24p

The number of people in the vehicle does not affect the above rates. The rates are only available for journeys, or any identifiable part or proportion of a journey, that are wholly and exclusively for business purposes. For example, travel from home to work is not a qualifying journey.

The self-employed can continue to claim for other costs not covered by the flat rate for mileage such as parking, tolls, and congestion fees as well as other separate travel expenses such as train journeys.

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