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Claiming for your car when you use it for business

There are lots of reasons why you might need to use a car in your business, from attending client meetings to making site visits. The rules for claiming vehicle expenses if you’re self-employed depend on what type of business you operate.

Car expenses for sole traders and partners

If you’re a sole trader or in a partnership, you can use your own personal car within the business, and claim tax relief. You can claim capital allowances for the cost of the vehicle, along with other associated costs such as insurance, road tax, and repairs. However, these costs must be apportioned by the amount the vehicle is used for business purposes. Watch our dedicated support video for sole traders claiming vehicle expenses.

Claiming vehicle expenses for limited companies

If you have a limited company then there are actually two ways to claim for using a car or other vehicle in your business.

The company can purchase the car, and then claim the actual cost and running expenses. Just remember that unless the vehicle is used solely for business purposes, Benefit in Kind (BiK) rules will apply, so the user will owe personal tax and the company will need to pay employer’s National Insurance.

The second method means you will own the car personally, and charge your company for mileage. You can claim 45p per mile for the first 10,000 miles in a year, and 25p per mile if you go over the threshold. This method is generally much more beneficial, unless the car used is extremely low or zero emissions. Find out more about claiming vehicle and travel expenses as a limited company.

Chat to one of the team for more support, or to find out about our online accounting services.

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VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

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