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  • Tax

    Vehicle Depreciation

    As it seems that landlords aren’t allowed to offset 45p per mile when travelling to/from there self managed rental properties, I understand that the way you’d calculate the costs for using your own vehicle to travel to your rental properties is as below.

    Work out the percentage of miles covered for your property business.

    Example

    Total annual mileage: 10,000.

    Miles covered visiting your rental properties: 2,500.

    In this example 25% of your mileage is property related so all of your vehicle related expenses can have 25% put down as a cost for running your property business.

    Example;

    Vehicle Excise Duty (tax) £200

    Fuel £1,500

    MOT/Servicing £200

    Insurance £300

    New tyres £200

    Total annual costs £2,400

    So in the above example, you’d put down £600 (25% of £2,400) as a cost for travelling to your rental properties.

    My question is, where does vehicle depreciation fit into all of this?  My properties are quite spread out so my property miles are far higher than the above example.  If you have a fairly new and or fairly expensive car, this sort of mileage has an affect on the value of the vehicle but I’m not sure how or where I’d record this depreciation.  Sticking with the 25% usage example, would you just record 25% of the vehicle’s depreciation in the year that you sell the vehicle?  If so, what if you no longer had rental properties when you sell the vehicle?  What if the percentage of property miles fluctuates during your period of ownership of the vehicle?  This could get very complicated.

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    I have never had a problem with 45P a mile for the first 4000mils then it falls to 20p a mile

    done it for years and years

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    Learn Change and Adapt ?????

    Me neither Dissy,  a number of accountants have recommended this practice to me.

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    Cheers DL.  45P / mile is certainly easier for me.

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    Would be interested to know where Essex Landlord got that information ?

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    I think a lot of confusion comes from that we are not running a business in the eyes of HMRC


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    Learn Change and Adapt ?????


    I thought it was 45p for the first 10,000 miles, 20p thereafter.

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    That sounds about right

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    Learn Change and Adapt ?????

    It is 25p thereafter

    Deb

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA