I sometimes use my car for business. What can I claim?
The easiest way to deal with the use of a motor car for business purposes is to use the HMRC Authorised Mileage Rate, currently 45 pence per mile for up to 10,000 business miles. This rate is set to cover all running costs including petrol, insurance, servicing and repairs.
It is possible for a sole trader to claim a reasonable proportion of the actual costs of running a motor car, apportioned according to the number of business to private miles. However, this is a more arduous calculation which may not give a significantly better result.
In the case of a limited company it is necessary to consider the scale charge payable by an employee who has use of a company car. The scale charge is based on the level of CO2 emissions, with the maximum scale charge set at 35% of the original list price. In many cases it will be more tax efficient for the employee own the car and to be reimbursed 45p per mile for business miles than for a company car to be provided.