If you work for yourself, there’s a good chance that you will be able to claim motor expenses for running your business. You may visit customers, suppliers, trade fairs, exhibitions, the bank and a whole host of other places in the course of running your business. There are a couple of different ways to claim the cost, but keeping a log of your miles may be a good idea regardless. We’ve identified 4 different times when this may be the case.
1. Sole trader – actual cost
If you use a vehicle for business which you claim the actual running costs (i.e. fuel, road tax, insurance, servicing, etc..) and you also use it for private use, then a record of business mileage will make any private disallowable proportions more robust if challenged.
2. Sole trader – pence per mile
If you are a sole trader and you claim mileage on the ‘pence per mile’ basis, then keeping a log of business mileage is essential.
3. Limited company – mileage claim
The default motor expense situation for company directors of small limited companies is to use their own personal cars for doing business travel. Therefore, a detailed claim of mileage incurred is robust and will stand up to scrutiny.
4. Company van
If a company is paying the running costs of its vans, why would it want to keep a mileage record? Because situations exists where a van is used simply for home to work travel and business travel, which avoids a benefit in kind on the driver. A record of business mileage is further proof that a van is not being used for personal travel.
Therefore, you can see that most instances of claiming tax relief on business motor costs will involve keeping a record of the mileage. It is not insurmountable if a record has not been kept, but as mentioned in (1), it makes any assertions as to the validity of business mileage easier to defend.
