Basically, No 1 son works for me as a heating engineer and uses his own van to travel to jobs (his choice to own and run the van). He travels from his home to the office (distance of 13 miles return) and then goes out to the jobs from the office. I know he can't claim for the home-to-office-and-back travel but I understand that I can pay him 40p per mile (up to 10000 miles, 25p per mile thereafter) on business travel. He will be keeping records of the business mileage covered. It would be difficult to pin down the exact mileage to specific jobs.
So him traveling to the work and you paying that mileage reduces your profit on each job - so i would argue a cost of sale. This gives you a good measure of how much profit you make on each job and allows you to 'better' price in future.
Or
If he doesn't need to use the van but you allow him to then it is an overhead.
So if you can't do the job without travelling, then travelling is a cost of sale, is that right? (I'm thinking of a consultant who works from home and always delivers at client premises).
There are no hard and fast rules but to get an effective measure of profitability then all costs to deliver the goods or service should be in cost of sales. IMO of course!
Thanks Elaine, It's one to ponder - whether 40p/mi for her business delivery will give her more advantage than her apportioning the business segment of her fuel purchases. It's made me thinnk, though
)
