Showing results for 
Search instead for 
Did you mean: 
Get your Payroll questions answered by a QuickBooks Product Manager here -

Simplified Expenses mileage method (with flat rates) versus Actual costs for vehicles

Here's a bit more about the differences between the flat rate mileage deduction and actual expenses or capital allowances.

Simplified expenses (with flat rates)

To claim business expenses for vehicles, you’ll use a flat rate to claim business mileage instead of claiming the actual costs of fuel and maintenance. HMRC have set out the following flat rates:

You don’t have to use flat rates for all your vehicles. But once you use them for a vehicle, you must stick with this as long as you use that vehicle for your business.

Tip! QuickBooks Self-Employed use this method to calculate your annual estimated taxes. Be sure to enter trips on the Mileage page.

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.

 Tip! Be careful not to claim expenses for non-business driving or travel, fines, or travel between home and work.

Actual Expenses

  • This method requires you to figure out what it actually costs to use your car for business.
  • Whatever you count as an expense must be related to the business miles driven, not personal.
  • You can claim expenses such as gas, oil, repairs, tires, and more.
  • Categorise your auto expenses on the Transactions page as Business > Car and Truck > Category. If you use your car for both personal and business use, categorise these costs as Business—no need to split with Personal. Your tax pro will calculate the business/personal ratio in your tax return based on the total expense amount.
  • We help you keep track of these expenses so you have them at annual tax time.

Car expenses and mileage are huge topics, and we can't cover everything here. But you can learn more from HMRC about Simplified Expenses Checker

Was this helpful?

You must sign in to vote, reply, or post

Need to get in touch?

Contact us