Milage Rates

Wavey

Morning all,

Im currently putting my tax return together using ros.ie.
Im a self employed Engineer.
Im a sole trader with a private car.

I usually drive about 18 miles per day to Client offices and I have to do the odd long haul down the country when site visits are required.

I also work out of my home office.

How do I quantify this travel in my tax return? It was suggested that I give myself the going Civil Service rate of €0.72 per mile. And take the total milage x €0.72 off my taxable income.

Does this sound right?
I'de appreciate any advice.

Thanks,
Wavey

kluivert

Check the revenue website for futher details but here is a summary from memory.

For persons who have to use their own car in the normal course of business then civil service rates may apply.

Depends on engine size of the car though.

Up to 1200cc, 1201cc - 1500cc, 1500cc and over.

E.g for up to 1200cc.

First 4000 miles in a calender year is 83.92cents a mile.

83.92cents x 4000 miles = €3356.80

After 4000 miles the rate is 42.47cents per mile.

Any other questions please do not hestiate to PM me.

Wavey

Thanks for the reply Kluivert,

I just spotted the milage rates on the revenue website but I cant find anything that explains which miles you can claim.

eg. I usually work 2-3 hrs a day from home then the rest in client offices which at the moment is 9 miles away. Other days I may have to drive a couple of hundred miles to/from site.

I pretty sure I can claim all of the miles to site but what about the 18 miles/day to the client offices?

Been googling this all day but know joy.

Any help appreciated.

Wavey

kluivert

Wavey

Do you keep travel expense sheets.

This details the mileage you do per day and totalled every month @ the civil service rate.

At the end of each month you should write yourself a cheque from your business account or take the above figure as drawings each month.

Remember as a sole trader you are taxed on the profits on your trade and not your income from the trade.

This is an expense is your accounts and should appear under Travel and Motor Expenses part of the ROS return after you click accounts extract.

Please note that filling in this is for informational purposes only and not to claim a relief. The relief is in your accounts and Travel expenses should be part of your adminsitration expenses which reduces your profit.

As for what mileage you can claim - Place of business to clients. If your place of business is your home then you calculate it from there.

Other motor expenses - You should also include the cost of all motor expenses eg Maintenance, Insurance, Tax and Fuel as an expense in your accounts. When you come to do your tax return should then add back an element that you would consider was used for personal use eg 50% ie motor and travel expense in your accounts is €8000 then add back €4000 for personal use to your assessable profits.

Wavey

Thanks for all the info kluivert,

Does this still apply if you are a sole trader as opposed to a ltd. company?

For example, I dont have a separate company a/c. I just have my clients pay into my own current a/c.

Basically what I have shown in my accounts so far is the number of miles I have done and multiplied by the civil cervice rate. This total is then deducted from my taxable amount.

Should I be adding some amount back to my taxable amunt to account for depreciation caused by personal use?

As I am not a ltd company I am not paying myself the going milage rate for business trips. (Does that make sense?)


Thanks again
Wavey



Thanks

ck1

Just for info, the following are the appropriate rates with effect from 1st July 2005.


Engine up to 1200cc - 52.16 cent up to 6437 km
26.40 cent 6438 and over


Engine 1200cc to 1500cc - 60.85 cent up to 6437 km
30.31 cent 6438 and over


Engine 1501cc & over - 77.21 cent up to 6437 km
35.67 cent 6438 and over

RainyDay

Wavey wrote:

I pretty sure I can claim all of the miles to site but what about the 18 miles/day to the client offices?

I'm pretty sure you can't - If the client office is your normal place of work, then you don't get to claim that milage.

NaasMan

Hi there,

Self Employed individuals are not entitled to claim Mileage rate or subsistence payments. They can however claim a deduction for their motor expenses.

In calculating this deduction, you would total your petrol, motor tax, insurance, servicing costs, and multiply by business mileage over total mileage. Normal place of work in not an issue of self employed individuals who work from home (unlike employees) as such, the distance which you travel to your clients every day should be classed as business mileage.

You would also be entitled to claim capital allowances based on 12.5% of the cost out the car over an 8 year period. Again, if you use the car for both private and business use, you will have to prorate based on business mileage over total mileage.

RainyDay

NaasMan wrote:

Normal place of work in not an issue of self employed individuals who work from home (unlike employees) as such, the distance which you travel to your clients every day should be classed as business mileage.

Are you absolutely sure about this? I understood that if you were based largely at a single location, Revenue would deem this location to be your normal place of work - whether you are an employee or a contractor.

NaasMan

RainyDay wrote:

Are you absolutely sure about this? I understood that if you were based largely at a single location, Revenue would deem this location to be your normal place of work - whether you are an employee or a contractor.

Wavey has said that he works out of his home office and that he travels to client offices

Revenue will not regard a employees home as there normal place of work unless there is that the revenue call a objective requirement that employment duties are carried out at home. However, I have never had a Inspector agree that a employees normal place of work is their home.

If a countractor was largely based on one site, there would be a case to say that site is where they are carring on their business, not there home, and as such, the travel costs to and from that sight would not be allowed. However, if this was the case it could also raise questions are to whether they are employees of their clients or are really self-employed.

From what I read Wavey is travelling to more that one location, and he is also doing work from his home office. If that is the case, he will be entitled to claim travel expenses, but only he can confirm that.

RainyDay

Wavey's initial comments were ambiguous. Yes, he did refer to 'Offices, but he also referred to an 18 mile round trip to those offices. Unless he has a number of clients all of which are located exactly 18 miles away from his house, this probably refers to a single client site. To be really clear, we'd need to know

1) Has he one 'default' location/office?
2) What percentage of days he spends at that location?
3) What percentage of days he spends at his home office?
4) What percentage of days he spends at other client locations?

Over to you, wavey.....

Wavey

Thanks for all the replies guys.

After doing a bit of research I think the situation is like this:

The majority of my week is spent in the client's office so I cant claim the milage from my home office to there.
But I can claim the miles from the client's office to various sites.

But because Im a sole trader and not a limited company, I cant claim the going Civil service milage rates. I can only claim the actual cost of the petrol/depreciation as Naasman said multipled by business miles over total miles.

I have a few more question if any body can help.

Can i also claim back a portion of the road tax/insurance/service cost?

@ Naas man. My car is private, not commercial can I still claim this 12.5 % ? If so how do the sums work out if the car was bought for 20k?
(20,000 x 12.5%)/8 = 312.50
So i duct 312.50 from my taxable income? Is that correct?
Can I deduct the full 12.5% in one single tax year instead?

Also how do I know how much to add back for the cost of utilities at my home office? I have ready many different figures on this. Some say Im entitled to 1/6 of the total cost, some say 1/4?

Thanks again for the help.

Wavey

RainyDay

Wavey wrote:

The majority of my week is spent in the client's office so I cant claim the milage from my home office to there.
But I can claim the miles from the client's office to various sites.

That matches my understanding too. Make sure your insurance covers you for business travel.

Sorry I can't help more with your other queries.