Clarification on Mileage for Sole traders

Hi all,

Looking for a little help on this one. I am currently doing an odd hour teaching swimming lessons in a number of different pools. It looks that this will substantially increase in the coming months. I wish to retain my normal PAYE job so I think setting myself up as a sole trader would be the most tax efficient and easiest way to continue.

I was doing a bit of research around the topic of mileage and am now totally confused. Revenue states that on a car used both for private & work use, the mileage can only be claimed for trip directly related to work – fine.

Now it also states that it can’t be claimed for trips to and from your regular place of work & home. Where is my regular place of work? If I go to my normal PAYE job in the morning then from there travel to pool A and work then to pool B and work and then home, which trips can I claim as mileage?

All except the trip to my PAYE job?
All except the trip to my PAYE job and my home trip?

Any help appreciated
Thanks

As far as I'm aware (from memory?) there is no 'mileage' allowed for Sole Traders. You can only claim a % of the running costs of your private car instead.

This makes it somewhat easier, as you don't have to get the % exactly right down to the last mile. You just need to work out roughly what you think it is, but staying within reason. You should keep all receipts from your private car (finance repayments, insurance, petrol, services, repairs etc) and base your figure on these.

You would only need to calculate it at the end of the year and put it as an expense against your year end Income Tax returns.

Thanks for the reply. So while the initial set up cost may be more it would probably be more tax efficent to set up a ltd company as opposed to a working as a sole trader? Basic salary and claiming mileage?

How would mileage work on my above situation?

Be careful of setting up a Ltd Co too quickly. I would advise against it if the only reason is to claim mileage.

If you were a Ltd Co. then yes, you would pay yourself a salary every month and then write yourself a cheque to cover your mileage. You would of course need to document all your mileage and keep records of same.

Personally, unless there is a huge amount of money coming in from the non-PAYE job, I would just declare the extra income at year end on my Form 12 and off-set some motoring costs and my accounting costs against the extra income.

Talk to your accountant.