It is not so easy when you use a vehicle that you use for both business and personal journeys. In these circumstances there are two ways of measuring the cost of your travel. You can either:
• Measure the whole cost of use of the vehicle and then apportion the costs between your personal and business miles covered or
• Use the simplified rate per mile, stipulated by HMRC (see below).
Either way, you need to keep a detailed mileage record so that you can calculate your travel costs.
If you use your vehicle more for personal than for business use, you may be better off using the simplified mileage rate, currently 45p per mile for the first 10,000 business miles you cover and 25p per mile after that. This rate covers both fuel and maintenance of the vehicle. Using this method will save you time. You may end up claiming a higher amount because the mileage rate includes an element of maintenance for the vehicle as well.
Conversely, if you cover more business miles than personal, you may be better off calculating the full cost of using the vehicle including fuel, insurance, road tax, MOT, repairs and maintenance. Unless you use your vehicle solely for business purposes, you will need to know how many business miles and how many personal miles you have travelled in the tax year to ensure you can work out how much you can claim in your tax return.
Once you decide on a method for a particular vehicle, you need to stick with it. You can’t move between the two methods.
It is worth noting that fines and penalties incurred are not allowed to be claimed.