The many advantages of self-employment attract entrepreneurs, offering them the opportunity to benefit from various tax advantages and mileage allowances. In this article, we look at how self-employed entrepreneurs can make effective use of these benefits.
One of the advantages of self-employment is the VAT deduction, the lower threshold relief and the wider tax deductions that reduce the entrepreneur's taxable income. In addition to these benefits, self-employed entrepreneurs can take advantage of mileage reimbursements to offset the costs of business travel.
Mileage allowances are an essential part of a self-employed entrepreneur's business, providing a way to offset the costs of commuting. Tax-exempt travel expenses can be reimbursed for business travel undertaken for the purposes of carrying out work.
However, in order to benefit from the mileage allowance, self-employed persons must keep accurate records of their travel expenses. This can be done, for example, by keeping a logbook or documenting receipts.
Keeping a logbook is key to taking advantage of mileage reimbursements and other deductions. Accurate documentation should record the purpose of trips, distance travelled, start and end times, and odometer readings. This allows the business owner to ensure that all eligible expenses are taken into account for tax purposes.
The Tax Administration's website provides more information on how self-employed entrepreneurs can make effective use of mileage reimbursements and other tax benefits in their business.