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Mileage allowance (simplified accounting)

Last updated: 08 Jun 2020

Who should use this method?

There is no universal “one size fits all” answer. Circumstances vary from one driver to the next; depending on the age of the vehicle, when it was purchased, miles driven etc.

Check if simplified expenses could save you money.

HMRC provide a really useful simplified expenses checker tool.

You can use simplified expenses or calculate your expenses by working out the actual costs.

Use this tool to work out which method is best for you.

What you need to know:

You’ll be asked to make estimates about some of your business expenses. This tool:

  • doesn’t give exact figures to use in your tax return - it tells you which way of calculating expenses might save you money
  • can only give an answer for one vehicle at a time - if you have several vehicles, start at the beginning for each vehicle

Don’t use this tool for vehicle expenses if:

  • You have already deducted your vehicle as a capital cost
  • you’re claiming for a car and you started using it for your business before April 2015

Who can’t use the Mileage Allowance Method:

  • If you’ve previously used ‘Actual Expenses’ Method in previous tax returns for the SAME VEHICLE
  • If you rent out the vehicle to another driver
  • If you don’t own the vehicle
  • If you share the vehicle with another driver
  • If you are claiming for a vehicle you started using for business before April 2015
  • If you are in a limited liability partnership or are a limited company

Vehicle Flat rate per mile with simplified expenses

  • Cars and goods vehicles first 10,000 miles: 45p
  • Cars and goods vehicles after 10,000 miles: 25p

You don’t have to use flat rates for all your vehicles. However, once you use flat rates for a vehicle, you must continue to do so as long as you use that vehicle for your business.

To find Mileage Allowance in the App:

Go to “Add Expenses” click in the “Description” field then select “Mileage Allowance”. Only enter the "Miles Driven", the App calculates the correct flat rates.

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