B2.439A Fixed rate deductions for unincorporated businesses
Unincorporated businesses, other than partnerships of which at least one member is a company, may calculate the profits of their trade, profession or vocation using certain fixed rate deductions, whether they also use the cash basis or not1. Use of the simplified expenses rules are entirely optional. From 2017/18 unincorporated property businesses may use the fixed rates for vehicle expenditure2.
Vehicle expenditure—flat rate deduction
Provided a car, motor cycle or goods vehicle3 is used for the purposes of the trade etc and is not an excluded vehicle, an appropriate mileage amount may be deducted in calculating the profits for the period if a deduction would otherwise be available in respect of qualifying expenditure on the vehicle (or would be allowable but for the fact it is capital expenditure)4. Once the flat rate has been used in relation to a particular vehicle, this method of calculation must continue to be used for as long as the vehicle remains in the business5.
An 'excluded vehicle' is a car, motor cycle or goods vehicle on which any capital allowances have been claimed, or is a goods vehicle or motor cycle, expenditure on which has been deducted in calculating the profits on the cash basis for small businesses6 (see B2.112), or the cash basis for unincorporated property businesses from 2018/19 (see B6.202C). A vehicle is not excluded where a landlord in an unincorporated property business has claimed capital allowances in respect of a vehicle in the tax years
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