# Can I claim vehicle mileage rate in this instance?



## A320 (Sep 15, 2010)

For my home business I use my vehicle very infrequently for business use (less than 500km a year). I have elected to not claim my vehicle and it's associated costs (fuel, maint. etc) as a CCA but am curious if I can still make a simple claim against the KM I did drive for business with the simplified rate (54c/km) outlined by the CRA. I recall a column under business expenses (T2125) last year that was labeled "Motor Vehicle Expenses (not including CCA)" but this year Ufile does not provide this column as an option anymore. Of course I can manually create it but curious as to why it's disappeared from this tax software.

Thanks.


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## OhGreatGuru (May 24, 2009)

Yes, you can claim operating costs. You can't claim CCA anyway unless the business "owns" the vehicle. I don't know enough about CCA to say if the business can own a fraction of the vehicle. But in your case it wouldn't be worth the paperwork to try.

You can claim mileage costs.


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## Charlie (May 20, 2011)

technically you cannot use the CRA mileage rates if you're self employed.

Practically, if you're claiming 500kms at $.54 I doubt anyone would care.


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## A320 (Sep 15, 2010)

Thanks for the replies. My home business is a sole proprietorship. I believe my accountant last year did claim the mileage. This year I am doing my own taxes but wanted to confirm this. Charlie do you have any reference from the CRA site regarding your first note?


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## Charlie (May 20, 2011)

I do recall seeing something more direct -- but you can parse it from here:

CRAs discussion on reasonable allowances specifically says it does not apply to self employed (while the page deals with benefits, the whole section addresses reasonable allowances and the mileage rates): 
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/bnfts/tmbl/fcts-eng.html

If you go to the motor vehicle section for self employed you'll see no mention of prescribed mileage rates:
http://www.cra-arc.gc.ca/E/pub/tp/it521r/it521r-e.html

The prescribed mileage rates are just for employees/shareholders, which are different from self employed.

taxtips.ca, which is usually pretty good also does not mention a per kilometer option for self employed auto deductions:

http://www.taxtips.ca/smallbusiness/motorvehicleexpenses.htm

I really wouldn't sweat it for the amounts involved. If I were in your position I would probably claim based on the mileage rate too, and I suspect an auditor would let it go (the full on calculation would probably come close enough).


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## A320 (Sep 15, 2010)

Thanks for the links.

I appreciate it.


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## OhGreatGuru (May 24, 2009)

In the first couple years of her self-employment (quite a few years ago) my spouse charged a mileage rate for using the family auto. Then when we bought a vehicle more suited to her business she changed to charging a proportion of the annual operating & ownership costs, based on the miles used for business. She was told in school (and it appears to have been approved by CRA) it was correct to use the mileage rate under some circumstances. If you do, you can't charge any other operating & maintenance costs, because that rate is established taking into account average insurance, gas, & routine maintenance costs. So either they've changed their policy or there is some other directive out there. But if there were you would think it would be referenced in the above-quoted CRA guides.


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