UK Simplified Expenses question

[Roblaura]

Hi all,
I am a Private Hire (taxi) driver in my 2nd year of trading and preparing my 2nd tax return for 17/18. Last year I used detailed expences and did not include capital depreciation for the vehicle I purchased solely for business use. I now understand I can use simplified expences calculated @.45p for the first 10k miles and .25p thereafter but cannot allow for capital depreciation for the vehicle. Is that correct and permissible?
I had to purchase an expensive most up to date smartphone essential to carry out my work but is also used for personal matters, how can I account for this on my tax return?
Thanking you in advance.
Rob

 

[Becky]

As with all things, it depends. Lots of useful guidance here:

https://www.gov.uk/expenses-if-youre-self-employed

 

[Roblaura]

Thanks Becky,
I have thoroughly read through all the information you suggest and I am unable to identify any reason why simplified vehicle expences would not be applicable to me. However, there are always caveats and exclusions hidden in the darkest depths of legislation that those of us who are not comprehensively familiar with may miss; for example: this does not apply to private hire drivers!
Thanks again
Rob

 

[Becky]

Excellent, thanks for reading through the guidance. Broadly speaking, if you use simplified expenses then you cannot claim for other running costs of the vehicle because they are already factored in to the mileage claim. You said in your first post that you have not claimed depreciation, I presume you mean capital allowances? If you have ever claimed capital allowances on the vehicle then you cannot use simplified expenses, but it sounds like that's not the case here. Likewise, if you start using simplified expenses for the vehicle costs then you cannot go back to using exact costs / capital allowances. There is a checker here:

https://www.gov.uk/simplified-expenses-checker

As far as I know, there are no rules that prevent private hire drivers from using simplified expenses

 

[Roblaura]

Thanks Becky, that's so kind of you to take the time to respond to my question. Yes, I did mean capital allowances and I did not include these on my previous return, so I'm going to go ahead and use simplified expences for my vehicle costs.
I assume I continue to use detailed expences for other allowable expences such as the phone.
Thanks for your help.
Regards Rob

 

[Becky]

Yes that's correct, you still continue to account for all other expenses as normal. The general rule for expenses is they are deductible as long as they are "wholly and exclusively for the purposes of the trade, profession or vocation".