My accountant only allows 20% for my motoring expenses, and has said it is the maximum that HMRC will allow as my tax band rate is 20%. I know you can change over to mileage at 45p per mile. However, a builder friend said his accountant allows up to 80% of his motoring allowance against his tax, and he is on the same tax band as me. Are the percentages on motoring allowance fixed for property landlords like me according to your level of tax (e.g., 20%), or can it be on a sliding scale? For instance, if I’ve used my vehicle more for managing my rental property in one year, can my accountant increase the percentage on my vehicle allowance or, is it fixed at 20%? 

Arthur Weller replies  

See HMRC’s Property Income Manual at PIM2220, which states: ‘The landlord may use a car or van partly for business and partly for private purposes. If so, they can split the running costs on a mileage basis and claim a deduction for those journeys undertaken wholly and exclusively for business purposes.’ So, I don't understand what your accountant means by correlating your motoring allowance expenses to your marginal rate of tax (i.e., 20%). Your percentage motoring allowance expenses is dependent on the facts in each year, and if in one year (say) half your total mileage is qualifying business mileage, you can claim 50% of your total motoring expenses as allowable.