Think I am getting myself in an unnecessary twist over puting mileage costs into the accounts of a client. He is a self employed Management Consultant, who when raising his sales invoices charges at an hourly rate, plus any mileage to visit his client at 40p per mile. (He is under the VAT threshold)
He thus keeps a log of all business miles travelled, and each month I put in an expense through the business of these miles, also at 40p per mile. My question is what happens when he reaches the 10,000 mile limit, (which he will do, as he easily travels 1,000 business miles each month. Can he still invoice out to his client at the 40p rate, but only put mileage costs through at the reduced rate of 25p, or do both have to be reduced to 25p once he reaches that 10,000 miles? He is saying that if its the latter, he will have to increase his hourly rate and not seperate the mileage out to his clients...
I may be reading your question incorrectly but it reads to me that the 40p per mile is what he is charging the client, not what he is claiming for mileage in his own car.
Your client would countinue to charge the client 40p per mile (which is I am sure by way of compensation for travel time rather than mileage per se) no matter how many miles he does (10k, 100k, immaterial).
For his personal reimbursement for mileage the rates are 45p for the first 10k and then 25p per mile thereafter.
The 40p per mile would be part of turnover rather than reimbursement by your clients client of expenses.
Hope that this response makes sense. I have to emphasise again. the answer is based on the mileage charged from the clients client being totally divorced from the mileage claimed from the business by your client.
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.
