Self-employed workers who use a vehicle in the course of performing their duties may claim money back from HMRC on a quarterly basis provided that they can demonstrate their vehicle usage relates solely to their work.
What Are the Rules for Reclaiming Travel Expenses?
Self-employed workers may apply HMRC’s simplified mileage rates of 45p per mile for the first 10,000 miles and 25p per mile thereafter for petrol and diesel cars unless they are claiming capital allowances on the vehicle or it is a company-owned and funded car.
Drivers of electric cars can recoup 45p per mile for all mileage, while motorcyclists may reclaim 24p per mile. Cyclists are entitled to 20p per mile.
Alternatively, individuals may recoup via the actual cost method in which they reclaim a percentage of their vehicle expenses based on the time it has been used for business purposes. This method is slightly more complicated and requires very specific records to be kept, demonstrating all of the costs of running the vehicle and separately attributing them to either personal or business use.
How to Account for Travel Expenses
In order to accurately calculate and claim for travel expenses, workers should keep accurate records of their expenses. These can be manual or digital, and business accountants Cheltenham such as https://www.hazlewoods.co.uk/expertise/business-accountants/cheltenham/ can help workers to determine the most appropriate method for their individual circumstances.
A business accountant can also advise individuals on other work expenses that they may be entitled to, helping them to maximise their income, reduce their risk and exploit suitable growth opportunities.