Just wanted clarification on something, when doing the year end accounts for one of my self employed clients, through-out the course of the year I have been putting through his fuel receipts as per the total on receipt as all fuel is used for business it is a company vehicle then at year end I have been adjusted the amount so that he claims back the 40p per mile as this maximises the amount of fuel expenses to reduce his tax bill. My question is that when I do his final accounts for the year end should I include this adjusted amount and increase his fuel expenditure for the year end figure or is it acceptable to just show it as an adjustment calculation as an additional calc to the final accounts?
Also do i need to adjust sage with the amount or should i leave sage as it is just showing the total amount per receipts for the year.
Just want to be sure on what I am doing and wondered what others do, thank you in advance.
-- Edited by lor on Monday 30th of August 2010 10:44:09 AM
See I'm not the only one working on a bank holiday.
If I understand your post correctly you are trying to claim mileage allowance as well as full vehicle expenses.
I am assuming that all the company vehicle expenses are on the accounts, fuel, insurance, road tax, servicing & repairs, depreciation etc, which is fine but unless your client has also been using his private vehicle for the odd business trip and recording the mileage the 40p/ mile allowance is not used, as the motoring expenses have already been accounted for.
The allowance is used to compensate for use of personal vehicles
ok I am going to take the adjustment I have made to convert to 40p per mile out of the equation. Sorry thnink I have complicated things here and got the wrong end of the stick.
unfortunately you cant claim both mileage and vehicle expenses. it has to be one or the other. If you are claiming all expenses, then you can claim capital allowances on the vehicle which is tax deductible. The only problem you have is that you cant swap from between expenses and mileage from one year to the next.
If you wish to adjust the vehicle expenses, such as fuel, mot, repairs, tax and insurance. best bet is to reverse all vehicle expenses along with the actual vehicle cost via drawings. Then post the mileage claim at the 40p.
However if you claimed expenses last year, then I think you have to treat the vehicle as being taken out of the business, but you cant swap it back next year.
Without more knowledge of the client I cant give a better answer so please use my thoughts as a rough guide only and don't rely on them as fact.
might be worth having a read on the Inland Revenue's website www.hmrc.gov.uk or perhaps give them a call to clarify what you are trying to achieve.
I will take the 40p per mile allowance out of the accounts all together and will just put through the company vehicle and the vehicles expenses, as this seems the simplest solution.
