Whether you are recently self employed, or have been working for yourself for many years, there are a few traps to avoid if you use your own car or van for business. Read on to check that you’re not falling into these traps.
- Don’t miss out on tax relief! You could be entitled to 45 pence per mile, for the first 10,000 miles and 25 pence for anything over this. If you are running your own business or operating as a sole trader, you may be entitled to tax relief from the Inland Revenue on the costs you are paying out, but you’ll need to keep a detailed record of your mileage to get ‘mileage allowance relief’. You can claim for visits to clients, and delivering goods but not for trips from home to work (even if you call into a client on the way).
- If you are using your own vehicle for work, check that your car or van insurance covers you for business purposes. You may not be covered if you have a policy that simply covers personal use. Remember that adding business branding to your vehicle can also count as an adaptation and render your policy invalid if you don’t mention it.
- In the UK you must Get sole trader Insurance with public liability from fasttraderinsurance or a similar company. In addition, policies typically include a fire and theft provision cover. Alternatively fully comprehensive cover will cover you against all damage to your vehicle: think about this if your business depends on the vehicle. Check whether you will get a replacement vehicle if yours is out of commission. Will you get the replacement straight away or only after a delay, and how long will you be entitled to it for?
- And of course, don’t forget to shop around for your car or van insurance. You can find big differences in premiums and some companies are more inclined to offer good deals for business use than others.