Vehicle running as allowable expense?

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    Vehicle running as allowable expense?

    Does anyone know whether (a percentage of) vehicle running costs, for a car which is mainly used for social, domestic and pleasure, is allowable under HMRC rules?

    #2
    When used for what. ?? Regards Peter

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      #3
      you can claim your petrol miles at 40p/mile for use with the business.
      Earn More Residual Income From Your Property - bills2big.net
      Landlords & Letting Agents It's A Must!

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        #4
        Yep agree but the journey has to be justified. A landlord has no requirement to visit the property more than once a year or at start/end of a tenancy, the odd inspection due to a maintenance issue may arise but keep a log book in your car and record each trip, calling in as you were passing does not qualify. Keep the letters you sent to give notice of your pending visit. HMRC are tightening up, however these only show during an enquiry. Regards Peter

        Comment


          #5
          Not quite so easy as this.....

          Vehicle costs can be apportioned as a business expense --- but there are reservations:

          1. If you have a letting agent, your claim will fail as the place of business is your letting agents premises and if you are employing them, then why are you visiting the property? If you manage some properties and employ an agent for others, then keep distinct records.

          2. Your place of business is not your home but the letting property, therefore you cannot claim for trips from your home to the letting premises, but only for trips between letting properties or from them for business purposes

          3. If you live in Southampton and let a former home in Northampton, the taxman may very well query if this was a business trip to see family and friends. I have had clients shooting themselves in the foot by putting in meal receipts for happy meals for children at McDonalds as business expenses on these trips...
          Steve Sims



          Approved LandlordZone topic expert and author of 'Understanding and Paying Less Property Tax for Dummies' - a guide to minimising property tax and maximising returns for landlords and developers.

          Comment


            #6
            Originally posted by Steve Sims View Post
            2. Your place of business is not your home but the letting property, therefore you cannot claim for trips from your home to the letting premises, but only for trips between letting properties or from them for business purposes
            Really? That's not what you said in point 1 above. Your place of business is wherever your place of business is. It is VERY UNLIKELY to be a place that is rented out. How can you run a business from a place where you are not permitted to go without permission. It will be either the LA's place; your home; or your offices - if you have them.

            Comment


              #7
              I don't make the rules, that's down to others, but if you want to be pedantic:


              HMRC Property Income Manual 2210 - Deductions: specific items: travelling expenses

              Overview

              Deductions for travelling expenses depend mainly on the ‘wholly and exclusively’ rule outlined at PIM2010.

              Revenue costs of travelling between different properties solely for the purposes of the rental business are an allowable deduction in computing rental business profits. But the cost of travelling from home to the let property and back will only be allowable if the purpose in making the journey is exclusively a business one. ‘Revenue’ costs are running costs (such as fuel, road tax, bus fares etc) as opposed to the capital costs (the purchase price of a car or van for example).

              Travelling expenses will not be deductible if the purpose in making the journey is partly private and, for example, includes a visit to the shops to buy weekly groceries. But a landlord can still have a deduction for a journey made solely for business purposes if any personal benefit they get is only incidental; for example, where they happen to stop on the way to pick up a newspaper.

              The purpose in making a journey is a question of fact. The landlord’s stated purpose is a relevant factor but it will not be decisive if they (or their family, friends etc) actually gain a substantial private benefit.

              Where the rental business is administered from an office outside the landlord’s home, the cost of journeys between home and either a property they let or that office will not be allowable. But the cost of travel from their business office to and from the properties, and between the properties, may be allowable provided, as always, it was incurred wholly and exclusively for business purposes.

              The landlord may use a car or van partly for business and partly for private purposes. If so, they can split the running costs on a mileage basis and claim a deduction for those journeys undertaken wholly and exclusively for business purposes.

              Capital expenditure on providing the means to travel (usually a car or van) isn’t deductible in computing rental business profits; nor is a depreciation charge. But plant and machinery capital allowances may be available. These allowances are deducted in computing the business profit or loss. The ‘wholly and exclusively’ rule applies to these allowances but, as with revenue expenditure, the landlord can claim the business proportion of the allowances. Plant and machinery allowances on cars costing more than £12,000 are also further restricted. For detailed guidance see PIM3000 onwards and the Capital Allowances manual.
              Steve Sims



              Approved LandlordZone topic expert and author of 'Understanding and Paying Less Property Tax for Dummies' - a guide to minimising property tax and maximising returns for landlords and developers.

              Comment


                #8
                I'm with Steve on this. You can not claim multiple visits to a rented property. Perhaps once a year but that is as far as it goes. As Steve points out, if you have several properties then there there some leeway but that is about all. You are not a letting agents so why do you need to keep visiting the properties. Regards Peter

                Comment


                  #9
                  I don't dispute for one moment, Pete, that if you have a LA then trips from your home are probably not allowable; however the W&E rule is a matter of fact, not a matter of some arbitrary number of . Were you visiting friends, or were you an obsessive visiter of your rental property? However, unless you have been instructed by him and thus have additional information, we DO NOT KNOW whether or not OP has a LA, thus in order to provide some sort of suggestion to his question we must consider both possibilities. Failure so to do is, again, bad advice.


                  Steve - what is the relevance of PIM2210 which debates W&E when we are discussing the place of business? You clearly state that the place of business is the let property. It cannot possibly be; you have no right to be there as it is leased! If he has a LA, it is at the LA's office; if he does not, then it is OP's home/office from where he controls his BTL empire. Again, you are inventing facts to suit your argument, rather than tailoring your advice to the (bare bones) facts provided. Dangerous...

                  Comment


                    #10
                    What !!!!!!!!!!!!!! Regards Peter

                    Comment


                      #11
                      Shopping trips

                      Originally posted by TaxationPete View Post
                      I'm with Steve on this. You can not claim multiple visits to a rented property. Perhaps once a year but that is as far as it goes. As Steve points out, if you have several properties then there there some leeway but that is about all. You are not a letting agents so why do you need to keep visiting the properties. Regards Peter
                      I claim for shopping trips to purchase maintenance materials as well as the trips to the property to carry out the maintenance. Surely these are legitimate business trips ?

                      Comment


                        #12
                        Yes, maintenance 'at' the property is allowed but keep a log of the trips in case you are asked. The trip must be solely for business purposes, picking up a tap washer whilst you were in B&Q any does not justify the trip as business. A good way to prove this is for the tenant to drop you a line or email 'requesting' the work. Regards Peter
                        Last edited by TaxationPete; 16-08-2008, 08:26 AM. Reason: Typo

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                          #13
                          Originally posted by Jolanta Nowak View Post
                          Does anyone know whether (a percentage of) vehicle running costs, for a car which is mainly used for social, domestic and pleasure, is allowable under HMRC rules?
                          There is no set percentage.

                          You will need to expand on the exact circumstances - business or employment.

                          If the former, then you have a choice - either the business proportion of all motoring expenses or, by concession, HMRC's mileage rates of 25p/40p (plus any finance interest)

                          If the latter (employment), only the HMRC mileage rates can be used.

                          I trust you have the relevant insurance cover for business use?

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