Driving allowance as self-employed

This is how self-employed driving allowance works

Når du er self employed, er der en række udgifter i forbindelse med virksomheden, som du kan få skattefradrag for og derfor kan trække fra din skattepligtige indkomst. Dette gælder bl.a. kørsel i forbindelse med arbejdet – Men hvordan er det nu lige, det fungerer med kørselsfradrag som selvstændig?

What is driving allowance?

Driving allowance, sometimes also called driving allowance or mileage allowance, is a deduction that self-employed people can get for driving in connection with work.

To get a self-employed driving allowance, you must drive your own car on white plates in connection with your company's tasks. However, there are certain requirements that must be met in order for you as a self-employed person to benefit from the driving deduction, which you can read more about below.

Generally speaking, a deduction is an expense that you can deduct from your income, so you have to pay less tax. Here, the driving deduction will cover expenses for driving in your own private car in connection with work tasks.

How does the mileage deduction work and how much is it?

As a self-employed person, you must book the driving yourself as deduction, and the rate of the deduction may vary depending on whether you drive more or less than 20,000 km per year.

This is how much you can get in driving deductions as a self-employed person

The rate for driving deductions or driving allowances is continuously adjusted by the state. You can read more about the rates here.

In 2022, the rate for the driving deduction is DKK 3.51/km before 1/5 and DKK 3.70/km after 1/5 for driving less than 20,000 km/year.

If you drive more than 20,000 km/year, the rate for the driving deduction before 1/5 will be DKK 1.98/km and after 1/5 DKK 2.16/km.

The Tax Council has exceptionally chosen this year to raise the rates in the middle of 2022, which is why you can currently find two different rates for this year.

When you need to calculate your driving deduction, simply multiply the number of kilometers driven by the rate that suits your driving.

Report driving allowance as self-employed

Most accounting programs have a function or a template called "Driving deduction", where you can easily fill in the amount for the total driving deduction - i.e. number of kilometers multiplied by the rate.

Your driving deduction is then booked and will appear as a deduction in your accounts and thus an amount on which you do not have to pay tax.

Keep track of your self-employed driving allowance

In order to be able to get driving deductions as a self-employed person, it is a requirement that you keep a driving record, which you fill in on an ongoing basis. This is a book or a place where you note the number of kilometers and other information about your driving, which is a requirement to be able to book the driving as a deduction.

You decide entirely yourself how this is done, but there are certain requirements for the content. The following information must appear in the driving record:

• Name, address, CPR or CVR number
• Date of the run
• The car's number of kilometers at the start of the journey
• The car's number of kilometers at the end of the journey
• The destination of the journey and any intermediate stop
• Number of total kilometers
• The driving rate
• The actual calculation of the driving allowance

Some choose to keep track of the information electronically, e.g. in an excel sheet, while others prefer to have a physical driving record. Regardless of what you choose, it is only important that you note down all the information in connection with driving in your company.

Other things about driving deductions as a self-employed person

In addition to the fact that the driving must take place in your own private car, and that you must remember to keep a driving record in order to be entitled to the driving deduction, it is also a good idea to check the Swedish Tax Agency's rules for what applies as work-related driving or commercial driving.

Do you have e.g. a fixed office from which you usually work, count the kilometers from your home to the office, e.g. not included in the deduction, as this is seen as private driving.

In general, it can be said that commercial driving can be characterized as one of the following:

• Driving between different workplaces for the same employer or customer. If your workplace is at home in your private home, however, driving from there to another workplace will not count.
• Driving within the same workplace in your own private car.
• Driving between home and workplace for a maximum of 60 days within 12 months (60-day rule)

By checking what the Tax Office defines as business driving, you are absolutely sure that only the kilometers that are actually deductible are recorded in your driving account.