Courier tax – explained

Tax Return guide for Couriers …What allowances and expenses can I claim?

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If you are a self employed Courier  you will need to complete a tax return so that you can declare your earnings to HMRC. This article will help to highlight some key things to remember for your tax return and how to save tax.

You should keep records of all earnings and keep an organised record of all fares and tips.  There are a number of taxi drivers that end up paying more tax than necessary, either because they haven’t recorded evidence of their costs or they don’t realise what expenses they can claim. All self employed people are allowed to claim tax allowable  expenses;  therefore you should try and get into a routine of recording your income and expenses on a daily basis if possible.

If you use your vehicle for your own personal use then you need to factor this in when any expenses are claimed. For example if you calculate that you use your vehicle 20% of the time for personal or family use, then you would need to reduce any relevant vehicle running expenses  by 20%.

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Allowable Expenses for Couriers

  • Petrol or diesel costs
  • The cost of repairs, servicing and running the vehicle
  • The costs of your annual road tax and your MOT test
  • The cost of washing or cleaning your own vehicle
  • Interest on any bank or personal loans taken out to purchase your vehicle
  • Your license and any other registration fees
  • The cost of running your office (if you have one) or use of your home
  • Vehicle insurance
  • AA/RAC membership
  • Radio hire
  • Accountancy fees
  • Advertising
  • Phone usage for business use
  • Parking and toll fees
  • Printing, postage and stationery
  • Professional subscriptions and trade Magazines

Capital Allowances can also be claimed for the cost of the vehicle. These can vary between 18% and 100% depending on the type of vehicle. Other assets used for the business may also be claimed.

An alternative to claiming the vehicle running costs is the HMRC’s Fixed Scale Mileage Rate which is currently 45p per mile for the first 10,000 and 25p thereafter. You can also claim 24p per mile for a motor cycle and 20p per mile for a bicycle. Please note: You cannot change from one method to another. Whatever method you adopt you have to stay with until you change the vehicle.

This includes a depreciation allowance (capital allowance) for the vehicle but does not include interest on any loan to purchases the vehicle. This can be claimed in addition to the mileage allowance.

Taxeezy Online Tax Return Service

Filling in a Tax Return may not be easy and can take up your valuable time. For only £99.00 (after tax relief £79.00) we can complete and file your Tax Return for you and ensure you claim all your allowable expenses, saving you tax. Just provide us with the information we ask for then leave the rest to us.

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