Good evening all.
I have just registered and I hope I am doing this right or I probably won't get many responses.
I am helping a friend get started with her new mobile hairdressing business and will be doing her accounts and tax return.
I have set up her initial record keeping schedules for her expenses and income plus a mileage log for her to complete. However, I am struggling to find an answer as to the best way to deal with her motor expenses.
The situation is as follows.
She doesn't own her own car and currently doesn't have the capital to buy one but her boyfriend (soon to be husband) has a car in his name which she will be using.
My initial thought was that she paid an amount of x per week to rent the car and left it at that then there was no complications for mileage claims but I wasn't sure if HMRC would be happy about this due to the fact that it is a payment to a partner/husband.
I then thought about using the 45p/25p per mile system but I'm not sure if this can be applied if she's not the registered keeper of the car.
Anyway, enough waffling on, I hope you're still reading. Any help would be greatly appreciated.
Mark
Don't think I've come across this before but my gut instinct (so I can get shot down) is not to use the 45p/25p as this includes an element for Capital Allowances. Does your friend contribute to repairs, road tax and insurance?
I'm thinking the fairest way to go is by claiming only the expenses paid directly by your hairdresser friend, and adding back according to the percentage of miles the car is used for private journeys.
Perhaps he can give her the vehicle as a wedding present :o)
She contributes in so far as her earnings will eventually make their way to the joint bank account which will be used to pay for car repairs, tax and insurance amongst other things not motor related.
Are you suggesting that they pay for all the motor expenses from their personal account and then apportion the total cost (including fuel costs) business/private and make a claim for the business element?
I'm thinking the fairest way to go is by claiming only the expenses paid directly by your hairdresser friend, and adding back according to the percentage of miles the car is used for private journeys.
Actually, you're right; there's no reason why a proportion of all of the motor expenses cannot be claimed; not just her contribution. I suppose at the back of my mind was that she may not earn enough to pay all of the expenses, but this isn't necessarily the case. Moreover, even if she couldn't afford the running costs on her own, there's no reason why cash introduced shouldn't be shown from her fiance.
