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​Landlords set to use mileage rates against tax

Friday 19 January 2018

Landlords have welcomed moves to allow them to use mileage rates in order to calculate their allowable deductions for motoring expenses.
MPs agreed to include Clause 36, which proposes this, in the Finance Bill which they have been discussing at committee stage this week. 
Mel Stride MP said that extending mileage rates to property businesses is ‘one of the most effective steps that we can take to simplify the tax system for landlords’.
He added that it is a change that stakeholders asked for during a recent consultation.
The option to use mileage rate is only open to individuals and partnerships running property businesses that use cars, goods vehicles, or motorcycles for business purposes.
Corporate landlords and partnerships with corporate partnerships cannot claim deductions in this way.
Mr Stride said that the change will mean that more than 2.3 million property businesses will have the option to use mileage rates to calculate their allowable deductions for motoring expenses, and that it could provide ‘administrative savings to approximately 1.8 million property businesses.’
“Mileage rates are also available to landlords using the cash basis, bringing further simplicity to that group’s tax affairs,” he said.
The move brings landlords in line with the self-employed and employees and is an attempt by HMRC to simplify the overall tax system. 
Landlords are strongly recommended to use a mileage log, showing the reason for the journey, the date and the number of miles travelled.
The Bill will now progress to stage 4, the report stage, which gives all MPs an opportunity to consider further amendments, but no date for this has yet been confirmed.

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