I am VAT registered. I have a client, I travel to his office once a week. He is approx 10 miles away. I invoice him monthly for the bookkeeping fees plus Travel at 60p per mile.
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
I believe the key factor is that mileage is from office to destination and therefore if your home is your office you are able to claim. Otherwise you need to go to office first.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
I think I see the question that your asking there.
Your business is claiming 60p per mile but you could just say that is compensation for traveling time (£12 per round trip) rather than mileage per se.
The 40p per mile is compensation from your business for use of your own car on business. That is paid from the business to you, the 60p is paid from the client to your business and is quite different.
Hope that makes sense and hope that you've been keeping well,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Kris - I am guessing that we are not talking disbursments but a charge to cover your travel costs and will be VATable. I am pretty sure this will be classed as income and added to your gross trading profit. Some business dont itemise the travel costs and build it into the normal chargeable rate.
So to answer your question and assuming that I understood the scenario, and that the vehicle is not on the books, then yes you should claim the 40p/ mile.
Bill
-- Edited by Wella on Friday 1st of October 2010 04:50:25 PM
cheers matey, I had a bit of a nasty virus yesterday so came home a day early. thankfully all gone now so got to do a bit of catching up with messages on the site.
Of course, another thing to bear in mind on the VAT front is that if your over the VAT registered threshold and not a limited company then the 40p/25p per mile is not open to you! (Crazy but true)
Had a quick glance at your site Kris and can't find and mention of you being limited so this may be something that you need to consider.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
Shamus wrote:Of course, another thing to bear in mind on the VAT front is that if your over the VAT registered threshold and not a limited company then the 40p/25p per mile is not open to you! (Crazy but true)
Does this mean that only Ltd businesses, registered for VAT, can claim Mileage ?
Or that a Sole Trader is unable to claim Mileage when he registers for VAT ?
Can't remember any of that being mentioned at the HMRC Allowances workshop.
-- Edited by ProBowlUK on Sunday 3rd of October 2010 12:23:05 AM
Shamus wrote:Of course, another thing to bear in mind on the VAT front is that if your over the VAT registered threshold and not a limited company then the 40p/25p per mile is not open to you! (Crazy but true)
Or that a Sole Trader is unable to claim Mileage when he registers for VAT ?
It isn't the registering for VAT that would disqualify the sole trader - it is being over the VAT threshold. Someone under the VAT threshold that voluntarily registers for VAT could still claim mileage.
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Never buy black socks from a normal shop. They shaft you every time.
I'm sure that even those nice people at HMRC don't know all of the intricate details buried in the darkest recesses of the UK tax system and even if they did they certainly wouldn't be able to go through all of it in a workshop.
I'm not for one moment suggesting that I do but little bits like this that are not fair or don't make a great deal of sense are the sort of things that stick more easily.
As Peasie stresses in his reply, I wasn't saying that it was the registration per se, it is the threshold that matter in this instance.
and take a look at the rules related to "Use of mileage rates to calculate motor expenses".
For the self employed there is some flexibility in the rules in that if the vehicle was owned before reaching the threshold then you can continue to use mileage rates until the vehicle is changed but that seems to come more into tax planning and beyond advice that we should be giving clients.
Hope that this clarifies the position,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Just read through the link you posted (have read through loads of times before) and it has dawned on me that I may not be interpreting the mileage section exactly.
Reading the third bullet point in the mileage rates calculator, it indicates that it is also possible to claim actual expenses (obviously not as well as mileage) instead of mileage. Can anyone clarify how this works, exactly, as I was under the impression that you could only claim actual expenses if the vehicle was on the books as a company vehicle.
The reason I have these doubts, is because I have two clients who use their private vehicles for business. In both cases (two different accountants) the full vehicle expenses have been claimed and an apportionment (basically a guesstimated percentage) posted to personal use on the tax return.
Any comments?
Bill
Edit: I have just read this recent post which seems to bear out what I thought about the vehicle being capitalised on the books.
I have always posted all motor expenses in the accounts for sole traders and for the tax computations have disallowed a %, say 20%, alhtough will depend on the client. I have never used the mileage route. In Ltd co's, its always the mileage route on ane expense claim form.
Can you just confirm I got it right (It's been a long day!!) You claim all expenses, regardless of whether it is a private vehicle, or has been capitalised as an asset on the books.
Bill thats right, I don't automatically go the mileage route, in fact I only claim mileage for those who do loads of miles in a fairly efficient car. I will claim for everything, fuel, rfl, insurance, mot, service, repair, and capital allowances and then disallow the personal use element. remember if claiming capital allowances and there is personal use, do not pool the car, it will need to be separate.
Of course, another thing to bear in mind on the VAT front is that if your over the VAT registered threshold and not a limited company then the 40p/25p per mile is not open to you! (Crazy but true)
It's very unfair on sole traders. I have a newish client who is a partnership, they have 3 vehicles used within the business, 1 commercial and 2 private. They put all their fuel through the books but by the time you've paid the fuel scale charge out of it they have been paying more in scale charge/vat than they've been claiming back from the vat on the fuel!!
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
