Vehicle Expenses for the Self-Employed: Private vs. Business Use

A vehicle used for both business and private purposes needs an allocation. The tax office expects a defensible split, not a guess.

The two methods

You can either deduct a flat rate per business kilometre, or track your actual costs (fuel, insurance, depreciation, repairs) and deduct the business share. Pick one and stay consistent.

The flat-rate method is simpler: you multiply business kilometres by a set rate per kilometre. It suits those who do not want detailed vehicle accounting.

The actual-cost method requires you to track all vehicle costs and the business share of usage. It can yield a higher deduction if your costs are high.

You choose one method and apply it consistently. Switching between methods to maximise the deduction is a red flag for the tax office.

• Flat rate per business kilometre.
• Actual costs apportioned by business share.
• Keep a log to justify either method.

Keep a logbook

A simple log of business trips — date, purpose, kilometres — is the evidence the tax office asks for. It does not have to be elaborate, but it has to exist.

A basic logbook records each business trip with date, destination, purpose and distance. This is the foundation of either deduction method.

You do not need to log private trips in detail, but the split between business and private use must be supportable, and a logbook is the cleanest way to show it.

Digital apps can capture trips automatically, reducing the effort to near zero. The important thing is that the record is real and complete.

Be consistent

Pick the method that reflects your reality. If you drive little for business, the flat rate is simpler; if you drive a lot, actual costs may pay off.

Reassess only when your circumstances genuinely change, such as buying a new vehicle or a major shift in business travel.

Consistency is itself evidence. A stable, well-documented approach over years is far easier to defend than a changing one.

What counts as business use

Trips to clients, suppliers and business meetings count as business use. The commute between home and your regular place of work generally does not.

For a freelancer working from home, the line can blur. Document trips clearly so the business purpose is evident.

If you use the vehicle only for business, you may deduct the full cost. Most freelancers, however, have a genuine private share that must be split out.

facturio keeps your invoicing clean, so the client meetings that justify business travel are documented alongside the kilometres you log.