After all of the excellent (and very helpful) responses to my query on the best 'domain purchase' I'm afraid I have another question...
(and I promise, if there is something I can help with I will return the favour!)
I am a new start up (although have kept books for family/friends - this is only my second 'external' proper customer), and have just taken on a sole trader car garage (as in repairs / MOT's etc, not car sales).
I was just wondering if there was anything I needed to be aware of, he is very good paperwork wise, and has had a bookkeeper for the last few years so should be very organised.
He did have a slight 'moan' that his last bookkeeper would not put through anything for his mobile telephone as it was not 'wholly and exclusively' for the business (I asked his useage approx 25% private, 75% work) or for his private car (he has a work van, but occasionally uses private car instead of van.
Would I be correct to assume that we could apportion a percentage of his mobile bill to the business as an expense - how does this translate into the VAT return? I assume the same with the business mileage on the private car? He would need to make a note of miles travelled and the VAT on the petrol for the business miles could be reclaimed?
Apologies, but I think nerves have set in about having a 'proper' client and my brain appears to have deserted me.
Apportionment of the mobile phone can be done, although not fully aware of the VAT rules on this. Will have a looksy.
Ah ha found this for clarification http://www.hmrc.gov.uk/vat/managing/reclaiming/private-use.htm
With regards to mileage on the private vehicle use, yes he he can claim the mileage and yes he can claim the VAT. However the VAT calculation is easy but you need to know the Inland Revenue Rates for it and he will also need to provide petrol/diesel receipts for each claim for mileage that show enough VAT to cover what is worked out on the mileage..hope your still following.
have a read of this http://www.bfca.eu/knowledgebase/mileage-allowance-payments/
The rules around mobile phones can be pretty complex, with different rules for iphones and blackberries. In general it is best to have the phone on a business tariff then all the expense can go through the books and the VAT reclaimed with a private percentage added back on the self assessment tax computation.
I have a contact who can help on switching to business contracts at no cost to the customer even if the contract has not finished yet. In some cases he can even give a phone for free. If you want his details let me know.
With regard to mileage expenses, he needs to manage a log of his business miles, you can claim 40p a mile for the first 10,000 miles then 25p thereafter. Thr VAT reclaim element varies dependant on the fuel and engine size. I have developed a mileage form which calculates all this for you and even links to the HMRC website to ensure the allowed rates are always at the right level.
If you claim the 40p per mile then you cantput any petrol or repair expenses through the business books. The 40p allowance takes into account fuel, insurance, maintenance and depreciation so is generally the best way to go.
In addition you will have to keep some petrol receipts that cover the periods he is claiming mileage for. This is a HMRC requirement.
A simple monthly expense form with some petrol receipts stapled to it will be sufficient.
Happy to give you and other members this really smart spreadsheet sheet for free (in return for some feedback only) Email info@optegra-financial.co.uk and one of my colleagues will forward it to you.
I use it in my business and have given it to loads of people who were not even aware of the VAT reclaim you are entitled to on a mileage allowance claim.
Hope that helps - do ask if you need anything else
Jeremy
-- Edited by GJRobbins on Tuesday 11th of January 2011 09:39:17 PM
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Thanks for your reply, very helpful. I'd love a copy of the spreadsheet to look at, if you could send it that would be very helpful. My email is Liz@ESTBookkeeping.co.uk
Thanks for all of the help and advice... I'll let you know how I get on!
