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Starting up:
Can I claim for all of my motor expenses?

The treatment of motor expenses as regards income tax relief and whether or not you can reclaim the VAT is quite complex.

Read about the VAT treatment

Running expenses
Motor expenses will include petrol, oil, maintenance costs, road fund licence, insurance, car cleaning and any other costs associated with the upkeep of the motor car.

You will be able to claim against income tax the proportion of your motor expenses that relate to your business. You will need to work out the overall business and private proportion of your mileage and you should do this by keeping a mileage log. Click on the link below to download a mileage log form:

Related literature:

A guide to maintaining a mileage log for the self-employed

Car parking
You can claim tax relief on the cost of car parking for the purpose of your business, but car parking at the business itself is treated as part of the cost of travelling from home to your principal place of business, and is not tax deductible.

Car purchase
You do not get full tax relief for the cost of a business car in the year that it is bought outright or on hire purchase. Instead relief is obtained by way of capital allowances, and we explain this further in the section Tax relief on your car and computer (click on the link below for more information).

Car leasing
There are special rules governing tax relief for car leasing. Generally speaking you can claim the leasing costs subject to deducting the private proportion, but you do not get any capital allowances. Ask for our advice if you are intending to lease a car with a market value in excess of �12,000 as the full leasing cost will not be tax deductible � there is a permanent disallowance of a proportion of the cost based on the application of a formula.