Cut your tax bill: claim the cost of using your own car
Another way to reduce your tax bill is to claim the cost of using your own car for business travel.
There are two ways you can do this. If your business’s turnover is below the VAT threshold, currently £83,000 a year, then you can add up your business mileage, multiply that by HMRC’s approved rates, which are the same as mileage rates for employees, and include that cost in your accounts. This is a simpler method than the other option, but if your car is a gas-guzzler, then you might find your tax relief is increased by using the second method.
If your turnover is above £83,000 a year, then you need to keep a full mileage log, showing not only business mileage but private as well. Turn the business mileage into a percentage of the total, then work out how much you’ve spent on your car all together – fuel, MOT, repairs, insurance, and so forth – and multiply that by the business percentage use of the car.
Check HMRC for the current simplified rates http://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles-