If you are self employed make sure you claim tax relief on the cost of running any car used for business purposes. By 'cost of running' HMRC include items such as petrol, car tax, insurance, repairs, MOTs and servicing. But beware, if you also use the car privately, you can only claim a proportion of the aforementioned costs (i.e that which related to business use). There are two ways of working out how much you can deduct:
- a fixed rate for each mile travelled on business, using HMRC's fixed mileage rates
- the actual expenses, worked out using detailed records of business and private mileage to apportion your recorded expenditure
Unfortunately you can not claim tax relief for the cost of actually purchasing the car.
For more information click on the following HMRC link.
So to sum up, make sure you claim the tax reliefs you are entitled to in order to reduce your tax bill!
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