Fuel costs..no mileage kept - The Book-keepers Forum (UK)

blondie · Veteran Member

Fuel costs..no mileage kept

Shamus · Forum Moderator & Expert

The client would undoubtedly be better off claiming mileage.

He needs to record the mileage to every client site that he has attended. It shouldn't be that difficult as no doubt he will be able to refer to his invoices to work out where he was and when. Then just Google each one to calculate the mileage.

Record every trip in his mileage log (which will feel like doing lines at school) and then claim the money through the company.

Of course, as you have all of the documentation it might be something that you offer to do for him (at a price).

If he does it the exercise will certainly make sure that he gets it right next year! If you do it then if he does high mileage then even after paying you he'll almost certainly still end up better off than not taking this route.

blondie · Veteran Member

Thank you for the reply Shamus, very helpful.

Can i just ask...if he knows which petrol 'top-up' is for work, could he not just put the whole amount through? Example: He puts £40 worth of petrol in to cover his next 2 jobs...could he not put the £40 down as expenditure?

If the 'Mileage' way is the only way to go then i shall let him know.

Thanx again.

D.x

RobH · Expert

If he is doing a lot of mileage it may well be worth going the mileage route, especially if he has an economical car. If, however he has a big thirsty motor it may be worth claiming all fuel, road tax, insurance, repairs, services and capital allowances on the car itself. All of these will then need to have an add back for personal use in the tax comp, which means whoever is doing his tax return will need to know what percentage the car is used for business and what percentage for personal use.

Rob

semsley · Guru

The mileage way is not the only way to go but if he is a self-employed sole trader then it is the easiest and the way he will make the most. All you have to remember is that it's 40p per mile up to 10,000 miles then 25p per mile.

As Shaun said it's easy enough to work out his business mileage by using his invoices as destination and using a journey calculator (I use the AA) to work out the mileage.

blondie · Veteran Member

Thats great, thank you all so much.
Looks like i need to go and purchase a mileage record book for him!

Now i know what to do, i'm going to get my head back in the books...oh joy.

Cheers.

D.x

Shamus · Forum Moderator & Expert

Hi,

just a quickie, sorry I made a sweeping assumption before.

Is your client VAT registered? If so, as a self employed person (unlike a VAT registered limited company) the mileage route would not be open to them and they would have to go with the more complex route as per Rob's suggestion.

You do seem to be acting more as an accountant then bookkeeper on this one. Be careful that you don't end up getting in too deep. If you feel that things are going over your head don't be afraid to put it in writing to your client advising him to seek the independent advice of a qualified accountant in relation to the tax matters associated with the travel expenses.

If you do that then whether they seek the advice or not at least you're covered for them eventually finding out that they would have been better off going another route with their expenses.

Oh yes, and tell the guy to buy his own damn mileage book!

All the best, hope that you're now more comfortable with it,

Shaun.

RobH · Expert

Hi Shaun,

I wasn't aware that the mileage route wasn't open to vat registered businesses. just doing a bit of reading through some posts today and thats the second thing I've learnt! Cheers,

Rob

Shamus · Forum Moderator & Expert

No probs matey,

we keep picking bits n bobs up from each other. Personally I take mileage as one of the plus points of being a VAT registered limited company rather than a sole trader.

The time that I think that we really get things sorted out though is where yourself, Bill, Sheila and myself end up in debates like that one on personal receipts for expenses for a VAT registered business and also the first AIA one both of which I took something away from.

Now if only they didn't keep going and changing the tax rules we would all end up as experts.

RobH · Expert

At least when they change the tax rules it means our clients are all the more confused!

Peasie · Expert

RobH wrote:

I wasn't aware that the mileage route wasn't open to vat registered businesses.

Just a query which I'm sure I've asked before but can't remember the answer. Or maybe I thought I was going to ask but never got round to it. But - is it the VAT registered bit that's important or the in excess of £68,000. What about those that are voluntarily VAT registered below the threshold? I thought they were still allowed to use the mileage method.

I now await a blindingly obvious answer as to why they can't - I really do set myself up for these.

Shamus · Forum Moderator & Expert

Hi Peasie,

it's actually the threshold rather than VAT registration that's important.

Have a read of this HMRC PDF which explains the treatment on page three.

http://www.hmrc.gov.uk/helpsheets/hs222.pdf#page=3

Talk in a bit,

Shaun.

lor · Guru

Are you saying a voluntary vat registered s/employed client who is below the threshold of £68,000.00 can claim mileage allowance and also the vat element of this?. I have read the link, but it is confusing me a little.

Shamus · Forum Moderator & Expert

Hi Lorraine,

the way that it reads to me is that voluntary registrations can still claim until they hit the compulsory VAT threshold.

Shaun.

lor · Guru

Yes, that is what I thought actually.

Thank you for your reply!

-- Edited by lor on Thursday 27th of May 2010 11:07:32 AM

blondie · Veteran Member

Hi all..i'm back with an update
I have worked out teh mileage for my client for the whole of the last financial year and it is: 11,800 miles travelled.
The car used is 70% business use and 30% Personal. (All the 11,800 is the Business part)
Am i still ok to go ahead with claiming 'Mileage' for him with it being so high...or maybe this isn't high to everyone else...just don't want to go down the wrong route!

All help as usual is welcome.
Cheers in advance

-- Edited by blondie on Monday 5th of July 2010 12:19:36 PM

adi2402 · Senior Member

Shamus wrote:

Hi Peasie,

it's actually the threshold rather than VAT registration that's important.

Have a read of this HMRC PDF which explains the treatment on page three.

http://www.hmrc.gov.uk/helpsheets/hs222.pdf#page=3

Talk in a bit,

Shaun.

Nice little bit of information there. I don't think i knew that. Just trying to cast my mind back to any I have done this way.

It does say "not over the limit at the time of purchase of the vehicle". which is maybe important for businesses that have grew quickly.

I'll need to try and remember this point althought only a handful of my clients are on this method.

Cheers Shaun.

RobH · Expert

Hi Blondie,

yes you can claim the mileage subject to the other posts on here. So first 10,000 miles at 40 p is £4000 and the next 1800 at 25p is £450. No need to adjust for personal use if all those miles are business.

Rob

blondie · Veteran Member

Thanx alot Rob, really appreciate it.
Cheers.