self employment tax expenses

[iloveglee]

I am newly self employed, does anyone know what the rules are on expenses using your own car to conduct self employment business. I am doing some work, as a self employed person, but need to use my own car to do the job. They pay me a small mileage allowance but this is nowhere near the amount the hmrc allow for travel. Would I be able to work out a deduction for the use of my car for work purposes, then deduct from that the amount they pay me. I am not quite sure how to do this.

[bednobs]

i don't understand why you want to deduct something from what they pay you! that means you get less money.
Anyway, when you are self employed, don't you just pitch your rates so that your expenses are covered?

[ummmm]

Unless the rules have changed....

If you are travelling from Job to job you can claim for that petrol, but who are paying you a fuel allowance?

Keep all receipts relating to your job, even if it's pens and paper. When you fill in your SE just add up your receipts and fill in the relevant boxes.

[Skyline D]

If you really are self employed then the money that your customer pays you for mileage allowance needs to offset against the genuine costs of business mileage (either calculated based on invoices, etc or on 45p per mile, whichever) and the remaining value can be used as a deduction in arriving at your taxable profits.

So if for instance your customer is paying you 20p per mile for your mileage you can claim a further 25p per mile as a deduction from profits before tax.

[cathfromsaron]

you do not get expenses when you are self employed ... you charge them a fee for the work and inc. these charges in your fee!

are you a sole trader?

[buildersmate]

No, Cath, you are wrong (again).
When self-employed one can charge a fee and expenses, if this is agreed as part of the terms of the contract.
Please stop guess this stuff.

[Flyhalf]

Are you actually self-employed? If "they" who pay you travel expenses are the only ones you work for, you need to consult hmrc leaflet ES/FS1, and www.hmrc.gov.uk/employment-status/index.htm#3
.

If you qualify, you will need to complete tax return and sheet SA103S or SA103F, dependent on turnover. The notes say
"You may be able to calculate your motor expenses using a fixed rate for each business mile instead of actual motoring costs. If you use this method you must not claim capital allowances on the vehicle. You will find information on using mileage rates in Helpsheet 222 How to calculate your taxable profits."
Simply include payments received in takings, and claim the allowable amount in the appropriate box.

[EDDIE51]

No personal experience, but my brother who is self employed tells me you claim 45p per mile business mileage and the tax office will not question it.

[twix123]

The Self Employed mileage rates for claiming motoring expenses for 2011-2012 are 45p per mile for the first 10,000 miles then 25p per mile thereafter, although you will have to deduct whatever has been paid to you from your claim.

[iloveglee]

thanks for the responses. it is pretty much as i had guessed in that the amount they pay for the mileage is added to the fee they pay me in the income box, then 45p x by how many miles i did in the expenses box. dont go there with the am i self employed or employed, this has been a bit of a bone of contention but i did the test of which you are on the hmrc website and because i provide the car to do the job and another criteria which slips my mind at the moment, i am self employed. i actually think i should be employed but the person running the outfit can be awkward and i dont want to do myself out of the job. evidently he may be moving on soon so the new person may be more approachable regarding this issue. for the moment, 2011 to 2012 is self employed and i shall proceed on that basis

[Skyline D]

Not that it really matter since the bottom line will be the same iloveglee but technically you wouldn't include the expenses they pay you as part of your income, you'd deduct them from your expenses directly before including the net figure in the expenses part. Your method over-states your turnover, though as I say, unless you are making fortunes and in danger of breaching VAT threshholds, it doesn't matter.

[iloveglee]

not much chance of getting into vat the amount of work I do, but thanks for the tip off, as you say bottom line is the same, hopefully hmrc have better things to do than go after little amounts the like of which i am earning