Limited Company - Mileage & Cars

If you use your own personal car, the following rates can be claimed for business journeys per tax year.

If you use your own personal car, the following rates can be claimed for business journeys per tax year:

First 10,000 miles
Cars: 45p
Motor Bike: 24p
Bicycle: 20p

Miles over 10,000
Cars: 25p
Motor Bike: 24p
Bicycle: 20p

You must keep a log of the miles travelled, the purpose of each journey, date and time. This is easy to do on an excel spreadsheet and can add up to a significant tax saving.

At the end of each month you put the mileage allowance through your bookkeeping and make a bank transfer from your company bank account to your personal account.

NOTE: all petrol and car expenses should be paid for by you personally and not the business if you intend to use the mileage allowance rates.

Travelling by train, bus, plane, etc are also eligible travel expenses, always keep receipts for the journeys made. Using taxis for all or a substantial part of your travelling is not accepted by HMRC.

Should I have a company car or use my own car?

We recommend that you use your own car for business use. You can charge the Company a mileage allowance for each business mile you travel (see above). This is tax free money in your hands and tax deductible for the Company.

If you did buy a company car you would be taxed on the benefit in kind.

Company cars used to be a good way for companies to give tax free benefits to directors but HMRC cottoned onto that very quickly and they are now quite heavily taxed.

Company vans are different to company cars so if you require a company van do please contact us to go through the details so we can advise.

For further help, or to enquire about joining our services, please call us on 0845 834 0264 or drop us an email at info@cmjaccountancy.co.uk.

Disclaimer

This information is for general information only. We take no responsibility for any action taken or refrained from in consequence of its contents. Always seek our professional advice specific to your circumstances before acting.