I run a small self-employment business from my own home and I use my car for some business use. Can I claim tax relief on any of my utility bills and mileage expenses?
As you use your home and car for business use, the business element of these expenses can be claimed as a business expense. To claim these expenses adequate records must be kept in order to identify the business element of these costs. For small business, this can be very time consuming, and therefore a small business with turnover below the VAT registration threshold (currently £85,000) can instead choose to claim a flat rate expense for business motor use and business use of your home.
The two claims are separate, that is, you can choose to use the flat rate scheme for motor expenses and claim actual expenses for use of your home and vice versa.
The allowable flat rate expense for motor cars and vans is 45p for the first 10,000 miles and 25p per mile thereafter. You cannot claim capital allowance on the vehicle, and therefore you cannot swop to this method if you have already claimed capital allowances. You must also continue to use the flat rate motor expenses until you change your vehicle.
If you also use your home for at least 25 business hours per month, you can claim a monthly flat rate expense which ranges from £10 to £26 per month depending on the hours. You can also continue to claim a proportion of phone and internet costs based on the actual business usage.
An alternative method would be to claim a percentage of your utility bills based on the number of rooms (excluding bathrooms) there is in your house, if you have a permanent office at home.
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