Many entrepreneurs use their own car to generate income, so they use the car for business purposes. How to deduct these vehicle-related expenses in accounting?
Do you have a car or a van? Do you drive more private or business trips?
- If you own a van and you drive more than 50% business-related driving, add a purchase receipt or an external price estimate of the van to our system. Navigate to the Settings page and Vehicle Settings section.
- Add the costs of the car - such as fuel, car repairs, etc. to your accounting and select "vehicle expenses" when adding the expense.
- If you also use the van for private trips, keep a driving log. You can use the UKKO Private Trader's driving logbook.
- If you own a passenger car and you drive more than 50% business-related driving, add the needed information about your car on the Vehicle setting page under the Setting page.
- If you use the car mainly for private drives, then please do not add any car expenses to your accounting. Keep a logbook for your drives. We will then be able to calculate the deduction on your business tax return.
With a driving log, you distinguish business driving from private driving
You need to record in the logbook the business trips and the total kilometers driven by the car during the financial year. The driving log is used to record how the total driving is divided between business and private drive. This information is needed for accounting and for tax purposes. The UKKO Private Trader service includes a driving log, to which you add the kilometers you drive easily and quickly. Currently, you can use this driving log if your business drive is over 50%. You can find more information about the driving log here.
In the driving log, the following information should be provided for each working trip:
- start and end time of the trip
- the starting and ending point of the trip and, if applicable, the driving route
- odometer reading at the beginning and end of the trip
- the length of the journey
- the purpose of the drive
- car user
From this link you can also read the Tax Administration's instructions for reducing car costs.