Hi sorry to be a pain - what I'm confused about is when the director pays for petrol for the company car, and claims 40p a mile standard rate for business miles. How does it tally up, when the money spent on fuel (therefore the cash at bank) will be different to the travel expenses that actually goes through the accounts (because of the mileage allowance). Won't the whole thing not balance?
The 40p per mile is to reimburse employees when they have used their own car and their own fuel. If it's a company car the mileage rate is lower depending on the co2 and the engine size of the company car. If your director is paying for the fuel directly from the company, ie not paying for it himself then there won't be any mileage claims involved.
Is the director claiming reimbursement of personal expenditure for the fuel expenses? If he is using a company card or company cash then you can't reimburse at 40p a mile. If he is paying for it himself and then claiming mileage allowance then the fuel expenditure will not be going through the books.
(Great minds think alike, Bev....lol)
-- Edited by farmergiles on Monday 21st of December 2009 07:11:17 PM
So if the director is claiming reimbursement of personal expenses for the fuel (at 40p per mile), then would it be treated in the same way as it would be if an employee was claiming these expenses?
Tom, it would be the same yes, however, if its a company car then it would be less than 40p per mile (would vary due to the factors mentioned in my above post). BUT, he wont be able to claim the mileage if the fuel is already being paid for by the company. Mileage allowance is only payable if the fuel used is the employees/directors own fuel (ie paid for out of their own pocket). The mileage allowances are therefore given to compensate for the fuel used for whilst on business and wear and tear of using your own car (hence the rate per mile being lower when in a company car as wear and tear wont be at the employees expense).
