I am self employed and although I use my car about 80% for business it isn't registered as an asset. I know that I can claim 40p per mile from HMRC and that is supposed to cover everything but when recording my car tax/insurance/repairs to I post them to the corresponding nominal ledger codes or do they all have to be posted to drawings? OR do I put 20% to drawings and other 80% to the nom codes?
Instead all this why don't you transfer your car to your business, register it as an asset, so that you can claim all the above expenses along with the depreciation.
If its not register , you wont be able to claim for above mentioned expenses & they will be treated as Drawings.
Kavitta
__________________
Kavitta Kakkani
Head FAO & Ops
DRC KPO
Unit No. M-101,
NSG IT Park, I.T.I Road,
Aundh, Pune-411007,
India
Tel:+91-20-25885433
www.drckpo.com
Thank you Kavitta. Regarding the 40p per mile do I post that from the bank account to the travelling nominal code or would I do a journal entry somehow in Sage Accounts?
when dealing with your car, you can eaither claim the 40p per mile or all of the other expenses,but not both - so 40p through travel and everything else through drawings, or all expenses through travel and then the 40p per mile doesnt go anywhere in the accounts as you can't claim it
one suggestion (which I did recently with a client) is keep a running record of the business mileage at 40p and also a copy of all your receipts for petrol, MOT, insurance, depreciation charge, etc and work out which is most beneficial - the later means you do have all the extra paperwork to keep - in the case of my client she was better off claiming the 40p per mile !
the problem with putting your car as a business asset is that when you come to get rid of it you may have a balancing charge or allowance for tax purposes - capital allowances (tax) are not necessarily the same rate as the one you would use for depreciation
hope this hasn't waffled on too much and confused you
Because I'm not a limited company though, just simple self employed me, am I still allowed to opt for the tax/insurance/petrol option? Without classing the car as an asset?
if you want to claim the actual costs of petrol, insurance, MOT, etc then you will have to enter the car as an asset - can't mix and match to suit unortunately
