QuickBooks Self-Employed uses the simplified expense method (with flat rates) to calculate the allowable business expense for your car, van, or motorcycle. The rate is based on the mileage you drive:
- Cars and goods vehicles: 0 - 10,000 miles - 45p
- Cars and goods vehicles: After 10,000 miles - 25p
- Motorcycles: 24p
Here's an example of how it adds up: If you drove 15,000 miles in your car for business, your allowance would be £5,750. (10,000 miles x 45p = £4500; 5,000 miles x 25p = £1250; Total mileage allowance would be (£4500 + £1250 = £5750). With a nice sum like that, it pays to track and claim a mileage deduction.
Using the simplified method, you can't claim vehicle insurance, repairs and servicing, or fuel costs, but you can claim all other travel expenses in addition to your simplified expense amount:
- Hire charges
- Vehicle license fees
- Breakdown cover
- Train, bus, air and taxi fares
- Hotel rooms
- Meals on overnight business trips
Tip! Be careful not to claim expenses for non-business driving or travel, fines, or travel between home and work.
Also, once you use the simplified expense method for a vehicle, you have to continue using that method as long as you are using that vehicle for your business.
If you used actual expenses or capital allowances for your vehicle in the past, we recommend that you consult your accountant for help in calculating the allowable expense with these methods.