Accountants for IR35 Contractors & Freelancers

Tax Tip - Week 3 - Tax Free Mileage Allowance Payments

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Budget 2009 today, and Professional Contractors and Freelancers willbe watching the budget day annoucements carefully especially in regardto those areas which HMT have already suggested they are "looking at".

Here is our list of things to watch out for:-

• Umbrella Companies and Overarching Contracts of Employment
• Staffing Comapnies and Overarching Contracts of Employment
• Income Shifting
• Temporary Workplace rules
• ESC 16
• Closing offshore tax schemes

Back to this weeks tax tip, its time to review how you claim business mileage and this weeks tax tip has all the details.

Professional Freelancers and Contractors can save tax by claiming Tax Free mileage allowance payments under the Approved Milage Allowance Payments Scheme.

The approved rates pay a higher amount for the first 10,000 in one class of vehicle so there is plenty of option for tax saving if you use a car for the first 10,000 miles in a year, and then a motorcycle for instance.

You can also do this for multiple employments, particularly useful if you change from an Umbrella Company to your own business, you can claim a 10,000 mile rate for both employments even at the same contract site.

This is for business journeys only, so please read the detailed guidance on Mileage Allowance Payments.