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Posted Sat, 28 Jan 2023 16:14:27 GMT by Liz
Good afternoon, I would be very grateful for any guidance regarding whether or not a driving instructor may use simplified milage when calculating expenses. The driving instructor in question is a self-employed sole trader, using their own vehicle with dual controls installed. This page explicitly states that driving instructors cannot use simplified milage: https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles- However, this forum post seemingly from HMRC staff suggests that it is possible: https://community.hmrc.gov.uk/customerforums/expenses/f2b96796-9aaf-ec11-826d-00155d9736d7 Looking at archived versions of the first link, it appears like the exception was introduced at some point between April and August 2020. I would be very grateful if anybody could clarify whether this is the case. Thank you very much in advance for any insight or expertise you may be able to provide.
Posted Wed, 01 Feb 2023 09:23:27 GMT by HMRC Admin 19
Hi,

From April 2013, any business can use a fixed rate per business mile to calucluate their business motor expenses. If a trader wants to adopt this method, they must continue to use it year on year, as long as they own the vehicle and they cannot claim any actual expenditure or capital allowances in relation to the vehicle.  

Traders need to keep a record of all business mileage underatken to support their claim for the mileage rate.

Thank you.
Posted Mon, 18 Dec 2023 13:11:27 GMT by HMRC Admin 19
Hi,

We have an updated answer to your query as follows:

Driving instructors cannot use simplified expenses for their dual control cars when calculating their profits. This is because simplified expenses cannot be used for a vehicle which is of a type not commonly used as a private vehicle and/or unsuitable to be used as a private vehicle. The courts held in 1964 that a dual control car is neither commonly used nor unsuitable to be used as a private vehicle.

Driving instructors should calculate the actual expenses incurred in relation to their dual control cars. In addition, annual investment allowance is available in relation to the purchase of dual control cars.

Thank you.
 
Posted Tue, 16 Jan 2024 22:56:32 GMT by Michelle24 B
If you had already adopted the simplified expenses method (re: mileage method), for a driving instructor’s dual control vehicle, prior to the changes and this has vehicle has not been changed since should you have ceased using simplified expenses method immediately? Should previous self-assessments be restated to this affect prior to the changes or not? Or can you continue to use simplified expenses method until changing the vehicle, which is consistent and in line with the mileage claim principles? Also, this car was purchased without dual controls and had dual controls installed for the purposes of driving tuition.
Posted Fri, 19 Jan 2024 08:24:56 GMT by HMRC Admin 20
Hi Michelle24 Brooking,
You cannot use simplified expenses as a driving instructor - Simplified expenses if you're self-employed.
If you have used this method for this source of self employed income you will need to amend your tax returns by writing in to say the wrong method has been used.
You will need to refer to overpayment relief in your letter and the first year that can be reviewed is 19/20 -
Self Assessment Claims Manual SACM12005 - Overpayment relief: Overview
Thank you.
Posted Fri, 19 Jan 2024 12:33:49 GMT by Michelle24 B
Thank you for your help. Are you able to confirm when Dual Controlled Cars were deemed as commercial vehicles and therefore excluded from using the simplified expenses method?
Posted Tue, 23 Jan 2024 10:51:23 GMT by HMRC Admin 32
Hi,

CA23510 advises that expenditure on or after 1-6 April 2009 a car's capital allowance treatment is based on carbon dioxide emissions (CA23535).

CA23510 - Plant and Machinery Allowances (PMA): cars: outline - meaning of ‘car’

CA23535 - Plant and Machinery Allowances (PMA): cars: outline of rules

The guidance also treats cars used by driving schools, fitted with dual control mechanisms, as not being cars (Bourne v Auto School of Motoring (Norwich) Ltd 42TC217).

Thank you.

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