The above Brief announces the withdrawal of non-statutory ‘business mileage’ deductions and agreements for ‘board and lodging’ private use adjustments. These are now superseded by the ‘simplified expenses’ rules as part of ‘simpler income tax for small businesses’ legislation introduced in 2013-14.

The Brief also sets out transitional arrangements for the withdrawal of ‘board and lodging’ and explains how businesses can use the ‘simplified expenses’ rules for business mileage, ‘board and lodging’ private use adjustments and flat rate adjustment for use of home.

By way of reminder, a non-statutory mileage rate scheme was previously available to small businesses, which allowed a deduction for business mileage to be computed using the ‘Approved Mileage Allowance Payments’ rates applicable under employment income rules.

With effect for the tax year 2013/14 onwards, this is withdrawn as the simplified expenses rules now provide a statutory basis to allow deductions for expenditure on motor vehicles to be computed using a similar, simple method. The new rules apply to all sole traders and business partnerships and provide relief for the costs of buying, maintaining and running the vehicles.

The Brief also contains details of how the new flat rates for business mileage, ‘board and lodging’ private adjustments and ‘use of home for business’ deductions are calculated under the new rules.