Motor Claims

daniel_nicoleta

Hi, there
I start trading as self employed person last year and for all year I used my personal car (petrol) for business journeys. What's the best choice to claim motor expenses: at flat rate or taking in consideration all the expenses and claim only the percentage of use?
And can I claim capital allowance for the car value?
It's a '99 car. Could you tell me how to calculate it? Thanks

jockey#1

Hi Daniel,

A soletrader cannot claim mileage, you can only claim for actual petrol/diesel expenses you incur. If you were a director of a company you would be able to claim a certain amount per mile. You should work out what percentage of your motor expenses are actually business related and disallow the rest.

Yes you can claim capital allowances on the car at 12.5% per annum. E.g if the car cost €10,000 you would get a capital allowance of €1,250 per year for 8 years however you should consider disallowing a portion of this if the car is not used 100% for your trade.

Jockey#1

Accountant

A sole trader can 100% definitely claim mileage. In general, if you are travelining more than 10k miles a year, you are better off claiming these miles. (This must be a car and not a commercial veh.)

jockey#1

Already a thread about this on another forum. http://www.askaboutmoney.com/showthread.php?t=30606
Has the Revenue given guidance on how a sole trader can claim mileage and if so under what circumstances?

Jockey#1

DUBACC

Sorry to burst your bubble Accountant, but mileage is no way allowed against taxable income for sole traders. Fuel, repairs, etc are allowed but mileage 100% is not. Had this confirmed numerous times by revenue during revenue audits!

Accountant

Whilst I applaud your confidence on this topic and acknowledge your experience with the revenue, I disagree!!!

I refer to the Income Tax Act 1967, Section 123 (see link)

http://acts.oireachtas.ie/zza6y1967.19.html

Having digested this chapter of the acts, please then refer to: Income Tax - statement of practice IT/2/07. (see link) (paragraph 2, page 4)

http://www.revenue.ie/leaflets/sp_it_2_07.pdf

If the guidelines in this revenue leaflet are strictly adhered to mileage expenses at Civil service rates are allowable.

Baby4

This post has been deleted.

DUBACC

I've read these documents before in detail and had revenue guidance on them also. As Baby4 states. it relates to actual vouched expenses as opposed to a flat rate per mile. Subsistence and running expenses fall under these headings and mileage expenses do not (unfortunately as i could do with them myself!). Safest bet is to claim for petrol, repairs, etc and leave the mileage. By claiming mileage you are just claiming twice on the one journey!

Unfortunately this is one of those numerous grey areas that exist in the Irish Taxation system and often leads to arguments between accountants.

mctechie

I've always found this a pain to track motor expenses in real life, as I kept loosing the sheets, forgetting to record the mileage etc.

So I finally bit the bullet and decided to design a Motor Travel Expense tracking spreadsheet using Google Docs,

By using Google Docs its available to me anywhere I have internet access (i.e my laptop) and my expenses are calculated in real time as a running total.

The spreadsheet automatically changes the rate depending on the amount of km's travelled (over 6437km per annum and the allowance rate changes).

So at the end of the month, everything is neatly calculated and recorded as per the revenue's guidelines.

I spent ages looking for a decent solution on the web and finally decided I needed to 'roll my own'. If anyone would like a copy of this spreadsheet the price is €10, (I would have happilly paid this to solve this problem!) PM me if you want a copy.

Regards,
Martin C.
http://www.techielive.com