What expenses are not allowedLast updated: 01 Nov 2021
Despite what other drivers will tell you there are things you simply can't claim as an expense. We have listed the obvious ones below.
Personal use of vehicle
If you use your vehicle for your personal use, then you need to factor this in when any expenses are claimed. For example, if you calculate that you use your vehicle 20% of the time for personal or family use, then you would need to reduce any relevant vehicle running expenses by 20%.
Clothing can only be deducted as an expense if the company or fleet you are working with requires you to wear a uniform or clothing with a company logo on it. A small cleaning cost of around £2 a week would be reasonable. Don’t forget that where a self-assessment return is judged to be incorrect and the amount of tax and NI underpaid as a result of an improper expenses claim, HMRC will pursue the lost tax and NI and will charge interest and additional penalties.
Don’t accept what other drivers tell you they claim or how long they have been claiming something – they just haven’t been caught yet. HMRC are there to help, call them on 0300 200 3310 and ask them.
Some accountants will tell you to claim expenses for meals; some drivers then take that to mean all meals or sustenance. That is incorrect and bad practice. The only time you CAN claim sustenance is when you are outside your licencing area doing a job which will take you around 2 hours, a country job. So you can’t pop home to eat. This would not be a regular occurrence and would be more likely acceptable to HMRC. You cannot claim your lunch every day (unless you work away from home). Again, HMRC is there to help, call them on 0300 200 3310 and ask them.
You certainly cannot claim fines - despite whatever other drivers might tell you.
Drivers can claim ANYTHING they want as a business expense; that is until you are the subject of an HMRC Intervention. Then you're in trouble; HMRC can go back and look at least 7 previous years accounts, to establish what you should have claimed. They will total up all the errors and you will need to pay all these underpaid costs along with penalties and interest. If you do your accounts properly you will never fear a tax intervention.