Q re car expenses for self-employed person

Foxtrot1

My wife is self-employed and drives to 3 different locations to work [this is 80% of the use of her car - 20% private use]. I'm not clear as to whether she claims 'car expenses':
-based on a km / mileage rate or
-based on receipts for petrol
Also...can she claim depreciation and - if yes - is that over 8 years?
Thanks!

namenotavailablE

When you say 'claim for car expenses' do you mean:

(a) Your wife adds back 20% of the actual car expenses to her accounting profit when computing her Case I income
or
(b) Your wife receives cash from someone for the journeys she has undertaken?

As she is self employed, I'll presume (a) is the answer. Basically, your wife will have prepared accounts for her business which should include a deduction for motor expenses. For tax purposes, however, the accounting profit needs tro be increased by the 20% personal element of the motor expenses (so, for example, if her accounting profit is €100 after having deducted €20 in motor expenses, her profit for income tax purposes will be €104 [€100 + (20% x €20)]

Re 'depreciation'- I'm guessing that you mean 'capital allowances' or 'wear and tear'. Yes- the rate is 12.5% per annum of the original cost, subject to restrictions on the maximum alllwable original cost. The restriction depends on whether the car was purchased pre/post 1 July 2008. For cars purchased on or after 1 July 2008 the 'carbon band' of the car [from A to F] impacts upon the cost available for capital allowance purposes. The rules are a bit detailed to list in full - I'd advise checking with an accountant to set out what applies in her case.

Foxtrot1

Many thanks for reply. She pays all her car costs herself. I'm still not sure however if she claims a fixed mileage rate or uses petrol receipts...?

TaxingTimes

Self-employed can only claim using actual costs.
Mileage rates are only for employees and directors.

Thoie

TaxingTimes wrote: »

Self-employed can only claim using actual costs.

Correct me if I'm wrong, but I think those actual costs include services, repairs, as well as petrol receipts.

namenotavailablE

@ Thoie- you are correct. It would also include tax and insurance- basically all car operating costs

Foxtrot1

thanks again