Motor Cycle Courier Tax Explained

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Tax Return guide for Motor Cycle Couriers

We can prepare your tax return online for just £130

What expenses can I claim?

If you are a self-employed Motor Cycle 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 Couriers 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.

It is now possible to claim a 100% capital allowance, in the year of purchase, for the cost of your Motor Cycle. This is called an Annual Investment Allowance. This is very useful and can result in some generous tax savings.

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%.

Allowable Expenses for Motor Cycle Couriers

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

Capital Allowances can also be claimed for the cost of the Motor Cycle. This can be 100% of the cost in the year it was purchased. Other assets used for the business may also be claimed.

An alternative to claiming Motor Cycle running costs is the HMRC’s Fixed Scale Mileage Rate which is currently 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 Bike.

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