As I have been away for quite a while I almost feel as if I should introduce myself again :)
I am doing the bookkeeping for a guy who is the sole director/employee of a limited company and the accounts to April 2010 need to be filed at Companies House by the end of the month.
The query I have is that he has paid just under £1k out of the business for fuel but the car is his personal one and he doesn't have a record of the business mileage. How should I record it?
Thanks for your reply, especially how you have shown the extra benefit of having the actual mileage.
If the client does not have the mileage but assures me that the car he has used this fuel in is only for business purposes and has another car for private use, could you tell me the best way to account for this.
It's starting to come down to the number of business miles. A couple of years ago, it was not uncommon to work on 10p p/m (i.e. £40 fuel = 400 miles). These days, with the price of fuel, that's a dream to all but the most efficient cars!
It is really down to him to make a claim on the company. He needs to provide a mileage figure. You can try explaining as above how it's in his best interests. For instance, if he has a diary of appointments, that may be a starting point.
I've always found that it's one thing explaining to clients that they need to keep records, but it can be another thing to actually make them do it!
Im new to this forum and not an experienced bookkeeper too.
I am doing the bookkeeping for a limited company and the director uses his personal car at the business. Hi gave me receipts to put through in sage for petrol what he spent.
He told me he pays for my petrol too as I need use my car to arrange things for him..
Apologized for maybe ask the same question but Im bit confused with things.
I have talked with my director and told to him the way what he need to do recording petrol.
So next day he said he spoke to someone yesterday about the petrol charges and they said that you can claim via receipt and the company benefit from the VAT as it is handled as incurred .
I feel very confused now and is so hard to talk with the accountants because they only come when the director call them to do important things and they have to ..and charge a lot of money each time so I dont know who I should ask if I have questions ..but hopefully the accountants will be able to clarify when they come to ask for the year end what I still havent done on sage.
They can only claim the receipts if the vehicle is in the name of the company. If the vehicle is in the name of director then they need to claim based on business mileage.
Suppose they could claim the receipts but then expect they would be charged a benefit in kind on the fuel as some of it will be personal. Not sure how the benefit would be calculated though it might be under the normal fuel benefit rules.
I have talked with my director and told to him the way what he need to do recording petrol.
So next day he said he spoke to someone yesterday about the petrol charges and they said that you can claim via receipt and the company benefit from the VAT as it is handled as incurred .
Sandra
Don't you just love the armchair experts, like the bloke down the pub who advised my fast-food outlet client to register for VAT so he could get claim £500 of VAT on equipment he purchased.
Many thanks for your respond. Finally my director understood what hes need to do ,but he said he don`t wanna write it done just he gonna let me know where he traveled. Anyway if you please could explain it to me whats next. how I`m gonna able to do this mileage log, should I calculate it on spreadsheet and whats the best way to process on sage? Maybe I haven`t mention that when he paid for the petrol he used the company card so I have that`s receipt so what should I do with this situation too ,not sure to how can I account them.
Simpliest way to maintain spreadsheet for mileage is to detail date, from/to, purpose of journey, mileage and then times by 45p to get the £ value. You can then adjust into SAGE on either a monthly or quarterly basis by
Dr Motor expenses
Cr DLA
If using the company credit card to pay for the petrol then this would be personal so would
Dr DLA
Cr Bank
Is the company VAT registered? If so will be able to claim VAT on the mileage based on the following link
So for instance was a petrol car less than 1400 cc then fuel element is 15p. Say they have done 1000 business miles in the period then that would equate to £150 (15p x 1k miles). You can then claim VAT of £25 (£150/6) provided you have VATable fuel receipts of £150 to support the claim.
Sorry if Im getting difficult but Im confused a bit ,the webside you gave me says reclaim VAT for company cars.The director has personal car not company one so we cant reclaim VAT then on the petrol .
Im wondering what should I do with the receipts from petrol what the director already has given to me and used the company debit card to pay petrol for hes personal car used at work..? Im about to reconcile the bank and Im not sure where should I account them on sage,maybe suspense account as its wrong and like you said if the vehicle is in his name he cant claim the petrol receipts.
To adjust into sage is it the same way to do Dr Motor exp ,Cr DLA for personal car use too?
You can use the link to reclaim the VAT on the fuel element of the 45p per mile. Basically 45p includes the total running cost of the car but you can reclaim the VAT on the fuel element as explained.
The following link explains it better but uses old rate of 40p rather than 45p
My manager told me we cant record as Dr DLA and Cr Bank coz the director (who is not owner of the company) paid with the company credit card for his petrol at the petrol station and this wasnt legal and the right way to spend money on it at all.
So basically my manager said that the DLA account for director who is owner at the company and not who isnt than I need to put this transaction to the suspense account.
Any idea how can I record this then in the sage account if not that way?
Any fuel purchased by a director on his company credit card (as with any other personal expenditure) I charge to the DLA when inputting the credit card transactions from the statement to keep it out of the companys` expenses
If he is not reimbursed for the mileage expenses, when you come to input the mileage you can journal it from the DLA to mileage expense account.
If the director has his mileage reimbursed I usually set up a creditor account on the purchase ledger and do the mileage sheets as a purchase invoice in effect, then pay from the bank as though he is a supplier - if there is vat to reclaim (on 12p per mile claimed) then I find it easier anyway to do this way even if he is not reimbursed as you can input the vat element more easily. Then you can just pay as a supplier through the bank then do a bank receipt on T9 code to the DLA to keep the bank right.
No fuel purchased on a company credit card for a car that is not in the company name should be charged directly to the company expenses.
As ever on these things there is more than one way to skin a cat and I am sure there is probably an easier way than how I do it, but it works for me and the end result would still be the same.
