NC Couriers said:
I'm currently using the business mileage scheme to account for all my motoring costs, which I'm counting as fuel, servicing plus parts, depreciation, courier insurance, MOT, road tax.
Where I'm not 100% sure is with GIT/PL insurance. Is this strictly a vehicle cost, as it is more to do with insuring goods and the general public? Obviously it's beneficial to find costs which are outside the scope of business mileage costs, so I wondered if anyone knows for sure.
My understanding is this; ANY cost for motoring connected to your business is deductible. I. E. Insurance, fuel servicing, repairs, tyres etc. Strangely, I am told, MOT's are excluded.
You can claim 45 p per mile for the first 10000 miles and 25p for EVERY mile after that. If you did 100000 miles a year that would equate to £4500 for the first 10000 miles and £18750 for the remaining 75000. Therefore, you can claim £23250 against your "profit". You can then claim such things as mobile phone bills, internet, organisation fees such as MT Van, CE and CX membership fees, work clothes, stationary, buying new phones etc, etc. the list is almost endless.
If you did 100000 total in a year in a small van and charged 60p per mile, of that 100000 miles possibly half is the outward (Paid) journey, you then have to return to base so as much as 50000 miles is "unpaid". 50000 miles at .60 is an income of £30000, less the £23250 claim for mileage would leave a taxable profit of £6750. the cost of your other expenses as mentioned above comes off this 6750 which can then reduce your profit again. If the combined cost of your other expenses total £2000 for example your profit is reduced by 2000 to £4750. You then have your personal allowances of £10500 so suddenly, on a turnover of £30000 you have no tax liability and could possibly even benefit from a tax rebate!
Get yourself a really good accountant- what they cost can easily be saved by the money they save you