Can anyone tell me the best way to account for fuel costs, I have a client who has a limited company and the accountant has told me to cost all fuel to directors Loan account and he will sort out at the end of year. I am used to dealing with mileage claims for employees but not sure what to do with the owner.
BUT I have just taken on accounts for a sole trader, he is in home maintenance and is therefore driving around a lot. How do I know what is personal and what is business? He says that most of it is business but I am not sure.
Do I put the fuel costs against the business on a percentage basis or do I get him to complete mileage forms, surely if he completed mileage forms he would end up getting more money than he paid for his fuel wouldn't he?
I would like to account for these costs monthly and not wait for the accountant to do something at the end of year.
Also, thinking about it, I am travelling to my clients place of work, can i claim some fuel back and how would I do this.
If he is a sole trader, just put all the fuel costs in the accounts. The accountant will disallow a % on his SA tax return when due. This will then account for his personal use.
You can do the same. Generally 15% is a good guide to disallow at the end of the year.
I would be inclined to place all fuel costs into a motor vehicle expense account, along with the other motoring expenses. If the sole trader uses the vehicle for both business and private then adjustments can be made at the year end (for self assessment tax etc)
You can claim you own mileage as business use and you can do it either as above for your sole trader or pay a per mile allowance to cover fuel, tax, insurance & wear and tear. Without looking it up I think you can claim 40p/ mile max.
Not sure why, the Director of the Limited Company would want fuel seperated from the main accounts, unless there is a specific reason, otherwise, again, I would place it in Motor Vehicle Expenses.
