If you use a vehicle in your business, you might be able to claim all, or some, of the costs for tax - it depends on whether you use the vehicle strictly for business or whether you also use it for private use.
When claiming vehicle costs, the following rules apply:
- If you are a sole trader or in a partnership and you use your own vehicle in the business, you can claim the running costs for income tax. You'll need to keep a log book as described below.
- If you use the vehicle strictly for business, you can claim the full running costs without having to worry about making adjustments for when you used the car in a personal capacity.
- If you use the vehicle to travel from home to work, or any personal travel, you will need to separate the running costs of your vehicle between business and private use. (Travel between home and work is not classed as business use.)
- If the vehicle is available for employees' or shareholder-employees' private use the company must pay fringe benefit tax.
You will need to complete a log book for 90 days of every 3 years (a log book’s term is 3 years provided any variance of the vehicle’s business use is less than 20% of that represented in the logbook). The log book must include the following:
- The date of each trip
- the vehicle’s odometer readings at the start and end of each trip
- the distance in kilometres of each business journey
- the reason for each business journey
If you have any questions please call 0800 555 024 or email email@example.com.