Calculate your car, van or motorcycle expenses using a flat rate for mileage instead of the actual costs of buying and running your vehicle, eg insurance, repairs, servicing, fuel.
You can’t claim simplified expenses for a vehicle you’ve already claimed capital allowances for, or you’ve included as an expense when you worked out your business profits.
Cars and goods vehicles first 10,000 miles = 45p Flat rate per mile with simplified expenses
Cars and goods vehicles after 10,000 miles = 25p Flat rate per mile with simplified expenses
Motorcycles = 24p Flat rate per mile with simplified expenses
Example: You’ve driven 11,000 business miles over the year.
10,000 miles x 45p = £4,500
1,000 miles x 25p = £250
Total you can claim = £4,750
You don’t have to use flat rates for all your vehicles. Once you use the flat rates for a vehicle, you must continue to do so as long as you use that vehicle for your business.
You can claim all other travel expenses (eg train journeys) and parking on top of your vehicle expenses.
Living at your business premises
A small number of businesses use their business premises as their home, eg a guesthouse, bed and breakfast or small care home.
You can use simplified expenses instead of working out the split between what you spend for your private and business use of the premises.
With simplified expenses, you calculate the total expenses for the premises.
Then use the flat rates to subtract an amount for your personal use of the premises, based on the number of people living on the premises and claim the rest as your business expenses.
Number of people: 1 = £350 Flat rate per month
Number of people: 2 = £500 Flat rate per month
Number of people: 3+ = £650 Flat rate per month
You and your partner run a bed and breakfast and live there the entire year. Your overall business premises expenses are £15,000.
Flat rate: 12 months x £500 per month = £6,000
You can claim:
£15,000 - £6,000 = £9,000
If someone lives at your business premises for part of the year, you can deduct only the relevant flat rate for the months they live there.
You and your partner run a bed and breakfast and live there the entire year. Your child is at a university for 9 months a year but comes back to live at home for 3 months in the summer.
Flat rate: 9 months x £500 per month = £4,500
Flat rate: 3 months x £650 per month = £1,950
Total = £6,450
You can claim:
£15,000 - £6,450 = £8,550