Hi, I'm a newby to this as have just taken on some work to help out a friend, so firstly apologies if this has been done already.
My friend has people work for him who provide him with petrol receipts for their business mileage which he reimburses by cheque with their monthly wages, these receipts are currently being logged in the petty cash section of the bank which I don't think is right.
I think I know what to do but woudl appreciate some expert advice, could someone please advise what I should do that is correct (i.e. do I need to set up new suppliers).
If the business is claiming mileage for its employees rather than fuel costs, then the receipt does not get entered at all. you need VAT receipts if the business is VAT registered. But not because you need to enter them.
The reason is that the VAT on the receipts must be equal to or more than the amount of VAT claimed in the mileage.
By entering mileage AND the receipts you're effectively double counting a proportion of the fuel/motor costs.
Hi, I would be tempted to set up as a supplier for each member of staff. Alternatively you could add it to the wages journal and post directly to the nominal. ie net wages CR (amount actually paid by bacs/cheque) paye/ni CR gross wages DR E'er NI DR Mileage DR
I would be tempted to use 2nd idea as all can be posted in 1 journal, could even mention it on payslip if required.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
I would agree with Martin...You are not claiming back the cost of all the fuel...you are paying the employees a mileage allowance which should be £0.40 per mile for the first 10k business miles
