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Mileage claim for sole trader

I travel in my car each day from home to client sites all over the county. I had thought that the mileage for those journeys was tax deductible. But HMRC states that travel costs between home and business are not allowable - anybody know how should I interpret this?

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  • I'm not an accountant but I would interpret this as...people that work for companies don't get paid for their fuel to travel to and from work...as you are a sole trader obviously it's different as you well know...if you treat it as if it were an employee...they would get paid for travelling to clients for the distance between their place of work and the client. So if your home is your 'place of work' then I would personally say that this should be allowable. If your place of business is elsewhere then the mileage between your place of business and the client would be allowable but not the travel to get to the place of work.

    I hope my ramblings make sense, as I said, not an accountant, just my interpretation so I may well be very wrong! Good luck

  • PRO

    It's been a long while since I was 'self employed', but if my memory serves me correct;

    If your 'home' is your business base ( i.e. you work and transact from that address) any travel costs to see clients can be treated as business mileage as set up on HMRC website.

    Any claimed expenses need to be wholly and exclusively for your business and a HMRC Inspector will apply a series of tests to check this if you have an inspection. I used to keep a mileage log ( ie a diary )

    The only time I think this changes is where you spend a considerable amount at 'one client' as I think HMRC would see this a 'variable' / changed place of work.

    Also I believe the rules on business expenses changed for this tax year, so it would be wise to check up on this....

  • Thank you for your input,it's much appreciated. I think what you say sounds right, although it's a bit of a grey area as you have indicated! I have 2 or 3 regular weekly clients, but at least 4 or 5 of my journeys each week from home to builders merchants, nurseries, print shops (for plan copies) and meeting new clients. Interpreting these rules will make a huge difference to what I can claim though, so I am keen to get it right!

  • PRO

    For a self employed person, with relatively simple affairs a fixed priced Accountancy solution with someone that specialises in small businesses will generate more business benefits than it costs.

    An added aspect...you can sleep easier at nights... I am great believer in having a dog and not barking myself :-)

  • As Gary says, a few hundred on an accountant is one of the best things a sole-trader can do. It pays for itself financially in most cases, as they know what to claim, but the peace of mind is worth far more.

    My business is based at home, and I claim all the mileage to clients/suppliers. My other half can't claim her mileage from home to her employer's office, but can claim if she is visiting other offices or clients at their home. I think the home-work exclusion is for the emloyed, or those who spend the majority of their time working in one place.

  • Thanks all for your comments, I will check it out with HMRC too.

  • PRO
    They are VERY helpful..

    Alice Meacham said:

    Thanks all for your comments, I will check it out with HMRC too.

  • PRO
    Have you tried recently to contact HMRC on any of their helplines ? They are massively underpowered, with continuing cuts hitting them, local advice centres closed and many staff never having really worked in/for businesses....

    There have been massive errors in codings, underpaid/overpaid tax - would you trust them ?

    Gardens4u.co.uk said:
    They are VERY helpful..

    Alice Meacham said:

    Thanks all for your comments, I will check it out with HMRC too.

  • PRO

    There are continuing errors on the Basic PAYE Online tools

    The HMRC 'Dashboard' continues to have errors and does not show your true state of affairs

    Incorrect codings being issues despite correct Returns being submitted

    Problems with business expenses on P11D benefit in kinds at Year End

    The list goes on and on...

    Each problem requires a call to HMRC Helpline if you have no Accountancy support

    That's the reality of the state of HMRC....with more cuts to come...

    But if you have the spare time, then I guess you can 'save' some money, but would you not rather be out working, doing your real job ?

  • PRO
    thats why they have the helpline number - it keeps people in jobs (good for the economy) ?!

    - thats the system for you ..

    Gary RK said:

    There are continuing errors on the Basic PAYE Online tools

    The HMRC 'Dashboard' continues to have errors and does not show your true state of affairs

    Incorrect codings being issues despite correct Returns being submitted

    Problems with business expenses on P11D benefit in kinds at Year End

    The list goes on and on...

    Each problem requires a call to HMRC Helpline if you have no Accountancy support

    That's the reality of the state of HMRC....with more cuts to come...

    But if you have the spare time, then I guess you can 'save' some money, but would you not rather be out working, doing your real job ?

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