Claiming Petrol Costs

[Nick]

Does anyone off set against tax the petrol costs for journeys made exclusively for visiting rental properties and how do you calculate how much to claim per mile?

[JDO]

Nick, you can claim a percentage of all of the following private vehicle running costs...

Petrol
Insurance
MOT
Servicing
Repairs
Road fund licence (Car tax)

The percentage has to be reasonable (eg 30%)

If 30% of your private car usage is solely and exclusively for your rental business can you claim the costs as an allowable expense (You will need to keep receipts etc as proof)

Hope this helps.

Regards

JDO

[dazalock]

Sorry, I disagree here, Ive been advised by my accountant that you can claim 40p per mile which includes fuel and associated running costs. You can claim upto 10,000 miles after which you can claim 25 p per mile. These are the same rates as any business milage. If anyone knows different, let us all know.

http://www.bicknellsanders.co.uk/content/taxcentre_taxcard/fixed.html

[JDO]

Dazalock, the allowances you are quoting are for an employee (ie someone being paid a wage by an employer and using their private car for business purposes)

Nick is probably registered as self employed with the IR for his rental business...if this is the case then all of the costs I mentioned in my previous post are legitimate expenses.

JDO

[JDO]

Dazalock, I forgot to mention in my previous posting...if you read IR150 (Taxation of Rents) everything is explained.

Details are also given in 'The Buy To Let Bible' by Ajah Ahuja.

Hope this helps

Regards

John

[Yardleystar]

Travel expenses come under complicated legislation and are based on your place of business

As an individual, your place of business is your home, so travel expenses to and from properties are ordinary commuting and thus not reclaimable. However, travel from a rental property for business purposes may be reclaimable.

As a limited company, your place of work becomes the trading location of the company and not your rental properties, therefore ordinary commuting does not take place and all travel costs for business purposes are reclaimable

Whether you use the fixed profits scheme (ie the 40p a mile for the first 10,000 miles etc) or apportion costs (ie 20% of your motor vehicle costs etc) is not relevant. This merely calculates how much you can reclaim.

[Tax Accountant]

For JDO's assistance, he should note that even self-employed persons within the VAT registration thresholds are eligible to use the Inland Revenue approved mileage rates rather than keep detailed records of all costs and then attempting to apportion them between business use and private use.

As confirmed by Yardleystar, mileage allowance at 40 p per mile for travelling to rental properties can be deducted as a rental expense.