Can I claim expenses for business use of shared vehicles?

Introduction: shared vehicles and business expenses

Shared vehicles are everywhere: the family car that doubles as your “client meeting mobile,” a vehicle jointly owned with a partner, a car club membership, a pool car shared between colleagues, or a friend’s van you borrow when you need to deliver stock. As businesses and households get more flexible, vehicle access is increasingly a mix of ownership, informal sharing, and app-based arrangements. That raises a practical question for anyone who runs a business, freelances, or is self-employed: can you claim expenses for business use of shared vehicles?

The short answer is usually “yes, in part,” but only to the extent that you genuinely use the vehicle for business purposes and you can support that claim with sensible records. The long answer is more nuanced, because what you can claim depends on how the vehicle is shared, what costs you personally bear, whether the vehicle is owned, leased, or hired, and whether you’re reimbursing someone else for using their vehicle. The tax treatment also turns on whether you are claiming actual costs (fuel, maintenance, insurance, depreciation, lease payments) or using a mileage-based method, where allowed.

This article walks through the key concepts you need to understand before making a claim, the most common shared-vehicle scenarios, how to apportion costs between business and private use, what records to keep, and the typical pitfalls that cause claims to be denied. It’s written in plain language with practical examples so you can apply it to your own situation.

What “claiming expenses” really means

When people talk about “claiming vehicle expenses,” they often mean one of two things:

1) Deducting business costs: If you run your own business, you may be able to deduct allowable business expenses from your income when calculating your taxable profit. Vehicle costs are a common category of business expense, but only the business portion is typically allowable if you use the vehicle privately as well.

2) Being reimbursed: If you work for an employer, you might be reimbursed for business travel costs under a company policy. Reimbursement rules differ from tax deductions, but the same underlying idea applies: the payment should relate to business travel, and you should be able to show it.

In both cases, “shared vehicles” introduce an additional layer: who paid the costs, who owns the vehicle, and who is entitled to claim the expense or receive reimbursement. The general principle remains consistent: only the person (or business) who incurs the cost for business purposes can normally claim it, and only to the extent of business use.

Business use vs private use: the foundation of any claim

The key to claiming vehicle expenses is the business/private distinction. Business use is travel that is necessary for your trade, profession, or business operations. Private use includes personal errands, commuting (in many systems, the regular trip between home and a normal workplace is treated differently from business travel), and social trips.

In a shared vehicle situation, it’s easy for private use to blur into business use. For example, you might pop to the supermarket after dropping off a parcel for a client, or take a detour to collect your child from school after visiting a supplier. A sensible approach is to treat each journey, or each segment of a journey, based on its primary purpose. Keeping a clear record of why you traveled helps you justify the business portion.

The more mixed your use, the more important it becomes to apportion fairly. Over-claiming is risky, and under-claiming can cost you money. A clear method, applied consistently, is your best friend.

What counts as a “shared vehicle”?

“Shared vehicle” can mean many things in real life. Here are the most common arrangements:

Family or household sharing: You and your spouse/partner share one car, or you use a family car owned by someone else in the household.

Joint ownership: Two people co-own a vehicle and share the costs.

Business partner sharing: A vehicle is used by multiple partners in a partnership or multiple directors in a small company.

Borrowed or informal use: You borrow a friend’s or relative’s vehicle for business trips, perhaps paying them for fuel or a contribution.

Car clubs and membership schemes: You pay membership fees and usage charges to access vehicles as needed.

Ride-hailing or car hire: You hire a vehicle short-term for a specific business need.

Pool cars and fleet sharing: A company vehicle is used by several employees.

Each scenario has different implications for what you can claim and what documentation you should keep.

Two main approaches: mileage method vs actual cost method

Where permitted, vehicle expense claims often fall into one of two categories:

Mileage-based method: You claim a set rate per business mile/kilometre driven. This method is simple and typically includes an allowance for fuel, wear and tear, insurance, and maintenance. If you’re using a shared vehicle, you may still be able to use this method if you personally are responsible for the vehicle use and you can track business mileage. However, some systems restrict mileage methods based on ownership, lease terms, or prior claims.

Actual cost method: You claim the business portion of actual costs you paid. This can include fuel, servicing, repairs, tyres, insurance, vehicle taxes/registration, parking for business, tolls, and sometimes depreciation or lease payments. In a shared vehicle scenario, the central question is: which of these costs did you pay, and can you show that your business use justifies the portion you’re claiming?

In practice, shared vehicles often push people toward a mileage method because it avoids messy cost splitting. But if you have high running costs and significant business use, actual costs can sometimes produce a larger claim. The best option depends on your circumstances and the rules where you file taxes.

Core principle: you can usually only claim what you paid (or what your business paid)

A common misunderstanding in shared vehicle situations is assuming you can claim a portion of “the car’s costs” even if someone else paid them. Most tax and reimbursement frameworks focus on who incurred the expense. If your spouse owns the vehicle and pays the insurance, tax, and servicing, while you occasionally put fuel in the tank, it would be difficult to claim a share of costs you did not bear. You may, however, be able to claim what you did pay (for example, fuel you bought for business travel) or use a permitted mileage allowance if you have a basis to do so.

Similarly, if you and a co-owner split all costs 50/50, you can typically only claim up to your share of the costs (and then only the business-use portion of that share). A clean paper trail makes this far easier: bank transfers, receipts, or a shared expense spreadsheet that reflects the true split.

Scenario 1: You use a family car owned by someone else

This is one of the most common scenarios. The vehicle may be registered in your partner’s name, but you use it for business travel. What can you claim?

Option A: Claim business mileage (where allowed): If the rules in your jurisdiction allow you to claim mileage for business travel using a vehicle you use (not necessarily own), this can be the simplest method. You track business miles and claim at the relevant rate. In some systems, you may need to show that you had permission to use the car and that you bore the cost of operating it in some way, but generally the key evidence is a reliable mileage log and proof you were traveling for business.

Option B: Claim actual costs you paid: If you cannot use a mileage method, or you prefer actual costs, you can usually only claim the costs you personally paid. For instance, if you paid for fuel for a client visit, you can claim that fuel cost for the business trip (or apportion if the fuel also covered private journeys). If you paid for an oil change and can show it relates to a vehicle used for business, you may claim the business portion, but this is more difficult when the vehicle is not in your name and you do not control overall usage.

Practical tip: If you regularly use a family car for business, agree a consistent arrangement: either you reimburse the owner for business mileage at an agreed rate, or you take responsibility for certain costs and keep records. Consistency and clarity reduce disputes and make your claim easier to support.

Scenario 2: Joint ownership and shared costs

Joint ownership means two people have a legal or practical stake in the vehicle and share costs. Maybe you split the purchase price and both names are on the paperwork, or perhaps one person legally owns it but you share costs as if it were joint. In either case, expense claims should reflect economic reality: what did you actually pay, and how much of your usage was business?

How to claim: Start with your share of the costs. If you pay 50% of insurance, 50% of servicing, and 50% of the lease payments, you treat 50% as your cost base. Then apportion that base between business and private use based on mileage or another defensible method. For example, if you drove 8,000 miles in the year and 2,000 were business, your business use is 25%. You might then claim 25% of your 50% share of eligible costs.

Where people go wrong: The most common error is claiming 25% of total costs (rather than 25% of your share) or claiming 50% of costs without showing that your payments truly were 50%.

Practical tip: If you split costs informally, consider setting up a dedicated shared account or a clear monthly reconciliation so you can show who paid what. Keep it boring and consistent.

Scenario 3: A business owns the vehicle but multiple people use it

When a business owns or leases a vehicle and it is used by multiple employees, directors, or partners, the claim often sits at the business level rather than the individual level. The business pays the costs and claims allowable deductions in the business accounts. The shared element is about usage tracking and, in some systems, whether there are taxable benefits for private use.

What matters: the business should maintain records of business vs private use, who used the vehicle, and for what purpose. A booking system, sign-out log, or app-based tracker can help. If private use occurs, you may need to treat it as personal use with appropriate consequences (for example, a taxable benefit in kind or a disallowance of private proportion in the business deduction).

Practical tip: Keep a policy document that states who can use the vehicle, for what purposes, whether private use is allowed, and how users must record mileage. A simple policy can prevent messy disputes later.

Scenario 4: You borrow someone else’s vehicle for business trips

Borrowing a friend or relative’s vehicle for business is common when your own car is unavailable or unsuitable. In this case, you need to be careful about what you claim.

If you pay nothing: If you borrow the vehicle for free and the owner pays all running costs, you generally cannot claim the owner’s costs. You might be able to claim direct out-of-pocket expenses you incur for the business trip (like parking or tolls) and, where permitted, you might claim a mileage allowance if your system allows mileage claims for a vehicle you use. Rules vary significantly, so the safe approach is to claim only what you paid unless mileage allowances are explicitly permitted.

If you reimburse fuel or pay a contribution: If you pay for fuel, you can often claim the fuel cost for the business trip (keeping receipts). If you pay the owner a fixed “thank you” amount, the treatment becomes murkier: it may be considered a hire fee, a reimbursement, or a personal payment depending on how it’s structured and documented.

Better approach: If borrowing becomes regular, formalize it. Either (a) reimburse at an agreed mileage rate for business miles, or (b) pay a documented hire charge with a clear record of the trip purpose. The more informal and cash-based the arrangement, the harder it is to support the claim.

Scenario 5: Car clubs, membership schemes, and pay-as-you-go vehicles

Car clubs and membership-based vehicle access are increasingly popular with small businesses because you avoid fixed ownership costs. From an expense perspective, these arrangements are often straightforward: you pay membership fees and usage charges, and you claim the business portion of those costs.

Business-use apportionment: If you use the service for both personal and business trips, apportion based on usage. Many services provide trip history, mileage, and invoices by journey, which can make record-keeping easier than with a privately-owned vehicle. If the app categorizes trips, use that feature, but don’t rely on it blindly—ensure the categorization matches reality.

Eligible costs: Membership fees may be deductible if the service is used for business. Usage charges for business trips are typically claimable. Extra charges such as refueling penalties or late return fees may or may not be allowable depending on the rules and whether they are considered “necessary” for business. Even if they’re technically allowable, they can look careless; keep them rare and well-explained.

Scenario 6: Short-term hire and rentals

Hiring a vehicle for a specific business purpose (such as visiting a remote job site or transporting equipment) is often the cleanest scenario from an expenses standpoint. The invoice is in your name or your business’s name, and it relates to an identifiable business need.

What you can usually claim: hire fees, insurance add-ons, fuel purchased for the trip, tolls, parking, and other directly related costs. If you extend the rental for personal sightseeing, apportion costs so the business claim reflects only the business portion. If the business and personal use are intertwined, keep a written explanation and a reasonable allocation method (for example, by days or by mileage).

Apportionment methods that make sense

Apportionment is the process of splitting costs between business and private use. In shared vehicle scenarios, you often have to do two layers of apportionment: first between owners/users (who pays what), then between business and private use (how the vehicle is used).

Here are common, defensible methods:

Mileage-based apportionment: Calculate the percentage of business miles out of total miles driven over a period, then apply that percentage to eligible costs. This is often considered the most objective method because it relies on measurable distance.

Trip-by-trip allocation: Allocate costs to individual business trips where possible. This works well for car club invoices or rentals, where each trip is clearly billed and recorded.

Time-based apportionment: Allocate based on days used for business vs private. This is often used for rentals, or where mileage is hard to track, but it can be less accurate for ongoing ownership costs if business days involve far less or far more driving than private days.

Hybrid approach: Some costs can be allocated differently. For example, fuel might be allocated based on business miles, while a flat membership fee might be allocated based on the proportion of business trips in the month. The key is consistency and reasonableness.

What not to do: Avoid “round number” guesses with no supporting logic, like claiming 70% business use because “it feels about right.” If you cannot track accurately, choose a method you can sustain and start keeping better records going forward.

Record-keeping: what to track and how

Good records are what transform a claim from a risky guess into a defensible deduction. With shared vehicles, records matter even more because you need to show both business use and your connection to the costs.

At a minimum, keep:

A mileage log: For each business journey, record the date, start location, destination, purpose, and distance. If you use an app, ensure it captures purpose, not just routes.

Receipts and invoices: Fuel receipts, service invoices, insurance documents, car club statements, rental agreements, toll receipts, parking receipts, and any other relevant cost evidence.

Proof of payment: Bank statements or card statements showing you paid the costs you are claiming. This is especially important if the vehicle is owned by someone else.

Sharing arrangements: If you split costs, keep a simple written note of the arrangement and evidence of transfers. Even a recurring monthly transfer labeled “vehicle costs” can help demonstrate your share.

Calendar or job records: If you claim frequent travel, it helps to have business records that align with the journeys (client appointments, job sheets, invoices).

Tip for simplicity: Set a monthly routine: export car club invoices, photograph or scan receipts, and reconcile mileage. Doing this once a month is easier than trying to reconstruct everything at year-end.

Common claimable costs (and tricky ones) in shared scenarios

Depending on your method and rules, you may be able to claim some of the following for business use:

Fuel or electricity: If you pay for it and it relates to business travel, you can often claim it (fully if exclusively for a business trip, or apportioned).

Insurance: Usually claimable proportionally if the vehicle is used for business and you bear the cost. If you are not the policyholder but you reimburse the cost, keep proof of reimbursement.

Repairs and maintenance: Claimable proportionally if you pay and the vehicle is used for business. If you paid a major repair on a shared vehicle, document why you paid it and how you apportioned it.

Tyres, servicing, MOT/inspections: Often treated similarly to maintenance.

Vehicle tax/registration fees: Often claimable proportionally if eligible and paid by you.

Parking and tolls: Commonly claimable for business trips even if you use a mileage method, depending on the rules. Keep receipts or app records.

Interest or finance costs: May be claimable in some systems under actual cost methods, but often complex in shared ownership cases.

Depreciation or capital allowances: This is where things get tricky. Claims for depreciation/capital allowances are usually linked to ownership and business use, and they can be restricted if the vehicle is not owned by your business or not used predominantly for business. If the vehicle is shared, documenting ownership and business usage becomes critical.

Fines and penalties: Parking tickets, speeding fines, and similar penalties are typically not allowable as business expenses in many jurisdictions. Even if you got the ticket while on a business trip, it’s still usually treated as a penalty for breaking the rules rather than a cost of doing business.

Commuting vs business travel in shared vehicle claims

One of the most frequent dispute areas is whether travel is ordinary commuting or business travel. While the exact definitions depend on the rules where you file, commuting is often treated as personal travel even if you do it to earn income. This matters because many people do a lot of “work-related” travel that is actually routine commuting to a regular place of work.

Shared vehicles can complicate this: perhaps you only get the car on certain days, and those happen to be days you travel to a client site. You still need to classify the travel correctly. If you have multiple work locations, travel between them can be treated differently than travel from home to a main workplace. Keeping a brief note of the journey purpose (and whether it was to a temporary site, a client, a supplier, or between workplaces) helps support the classification.

Partnerships, sole traders, and limited companies: why structure matters

Your business structure can affect how vehicle costs are treated and claimed.

Sole traders/self-employed individuals: You typically claim expenses personally as part of your business accounts. Shared vehicle claims often revolve around apportionment and proof of payment. If the vehicle is owned by someone else, you may need to focus on what you paid or use an approved mileage method.

Partnerships: Partnerships sometimes claim vehicle costs at the partnership level, but partners may also use their own vehicles for partnership business and claim mileage or reimbursement. Shared vehicles among partners require a clear agreement about who pays and how costs are allocated.

Limited companies: If you operate through a company, the company may own or lease the vehicle, or you might use a personally owned vehicle for company business and claim mileage reimbursement from the company. Shared vehicles used by multiple directors or employees can create additional considerations around private use and company policies.

The safest approach is to align how you pay with how you claim. If the company pays for a car, keep the costs in the company. If you pay personally, consider mileage reimbursement. Mixed approaches can work, but they demand more documentation.

How to handle reimbursements between people sharing a vehicle

If you share a vehicle and one person is using it for business, reimbursement is often a clean solution. For example, if your partner owns the vehicle and pays most costs, you can reimburse them for business use. How you do this matters:

Mileage reimbursement: Paying a set amount per business mile is simple, especially if it aligns with common reimbursement practices. You keep a mileage log; the owner receives reimbursement; you have a clear basis for the amount.

Cost contribution: Alternatively, you can contribute to insurance and maintenance. This can be harder to connect directly to business use unless you also track mileage and apportion.

Documentation: Whatever method you use, document it. A monthly transfer with a memo and a corresponding mileage report is often enough to make it understandable and supportable.

Examples: putting it into practice

Example 1: The shared family car

You are self-employed and use the household car for client visits twice a week. Your partner owns the car and pays insurance and maintenance. You pay for fuel when you use the car. Over the year you drive 1,800 business miles. You keep a mileage log and fuel receipts. You claim either a permitted mileage allowance for 1,800 miles (if allowed) or you claim the fuel you paid that relates to business trips (if you cannot use mileage). You do not claim the insurance or maintenance because you did not pay it.

Example 2: Jointly owned car with split costs

You and your sibling co-own a car used by both of you. You split all costs 50/50 and can prove it via bank transfers. Total eligible running costs are 4,000 for the year. Total miles are 10,000 and your business miles are 3,000. Your share of costs is 2,000. Business proportion is 30%. You claim 600 as the business portion of your costs (plus any directly attributable business-only charges like a business parking fee if your method permits).

Example 3: Car club for mixed use

You use a car club for both personal and business trips. The app provides trip-by-trip invoices. In a month, you spend 220, of which 140 relates to business trips and 80 to personal trips. You claim 140 for that month, keeping the invoices and a short note of each business trip purpose.

Red flags and common pitfalls

Shared vehicle claims are more likely to be questioned because they can be easy to inflate. Avoid these common pitfalls:

Claiming costs you didn’t pay: If the cost is in someone else’s name and paid from their account, it may be difficult to justify your claim unless you reimbursed them and can show it.

No mileage log: Without a log, you are left with estimates, which are vulnerable to challenge.

Overstating business use: Claiming very high business use (like 90%+) on a shared family car will often look unrealistic unless you can prove it.

Including commuting as business travel: This is a frequent error and can inflate claims significantly.

Inconsistent methods: Switching between methods year to year without a clear rationale, or applying different apportionment logic to different costs without explanation, can undermine credibility.

Claiming penalties: Fines and penalties are usually non-deductible. Don’t try to bury them in “vehicle expenses.”

What if you can’t get perfect records?

Not everyone starts with great record-keeping. If you have gaps, you can still improve your position by reconstructing as carefully as possible using available evidence. For example, calendar entries, client invoices, job scheduling apps, and maps can help rebuild a mileage log. Bank statements can show fuel purchases. Car club platforms can provide historical trip data. The key is to be honest and reasonable and to improve going forward.

A good approach is to set a “go-live” date for better tracking and keep excellent records from that point onward. If you have to estimate for the earlier period, do it conservatively and explain your basis in your notes. Even if you never need to show those notes, they help you stay consistent.

Special considerations for electric vehicles and charging costs

Electric vehicles introduce new cost categories, especially when charging happens at home. If you share an EV and charge it on a household electricity account, apportionment can become more complex. The cleanest approach is to use charging records from a home charger app or public charging invoices to identify business-related charging. If you cannot identify charging by trip, you may need to estimate based on business miles and vehicle efficiency, but you should keep the assumptions consistent and reasonable.

If you reimburse another household member for charging costs, document the basis: for example, a monthly calculation of business miles multiplied by an estimated cost per mile, supported by electricity rates and charging efficiency data where available.

How to decide the best approach for your situation

To choose a sensible claiming approach for a shared vehicle, work through these questions:

1) Who owns the vehicle? Ownership can affect eligibility for certain methods and for depreciation/capital allowances.

2) Who pays which costs? Your claim usually needs to align with costs you bear, directly or via reimbursement.

3) How mixed is the usage? The more private use, the more careful your apportionment needs to be.

4) Can you track business miles reliably? If yes, a mileage method or mileage-based apportionment is often simplest and most defensible.

5) How often do you use the shared vehicle for business? Occasional business use may be better handled via trip-by-trip expense claims (fuel, parking, rental invoices) rather than trying to apportion annual ownership costs.

6) Are there employer reimbursement options? If you’re employed, reimbursement may be easier than personal tax deductions, and it can reduce the need to apportion complex costs.

Best practices for a smooth claim

Shared vehicles don’t have to be a documentation nightmare. These best practices can keep your claim simple and robust:

Use a mileage app or logbook: Capture trip purpose and miles as you go. Don’t rely on memory.

Separate business payments where possible: Pay business-related fuel and parking on a dedicated card or account, so it’s easier to trace.

Agree on a household or co-owner policy: Decide whether you will reimburse via mileage or split actual costs. Write it down, even informally.

Keep invoices and proofs of payment: Save digital copies of receipts and statements. Use folders by month.

Be consistent: Apply the same apportionment logic throughout the year unless circumstances change, and note any changes.

Be conservative with grey areas: If you’re unsure whether something is allowable, either exclude it or keep a strong explanation and supporting evidence.

Conclusion: yes, but claim carefully and proportionately

In most cases, you can claim expenses for business use of shared vehicles, but the claim must be grounded in two things: (1) clear evidence of business travel or business usage, and (2) a logical link between the costs claimed and the costs you actually paid (or your business paid). Shared vehicles add complexity because costs and usage are split among people, but the underlying principles stay the same: claim only the business portion, apportion fairly, and keep records that make your story easy to understand.

If you regularly use a shared vehicle for business, the best thing you can do is systematize the process: keep a mileage log, choose a consistent claiming method, and document how costs are shared. That turns a potentially messy area into a routine part of your business admin—and helps you claim what you’re entitled to without unnecessary stress.