The taxpayer can claim the business proportion of the interest on a loan used to purchase the vehicle or the finance element of a hire purchase or finance lease.
So, your completely right in your original post and I was leading you up the garden path with my reply in that interest is taken seperate to the other expenses... Which makes absolutely no sense at all to me as why should HMRC subsidise how someone chooses to finance what is at the end of the day a private vehicle regardless as to it's business usage!
Right, I'm off to be a courrier in either a BMW M3 or an S class Merc!... Actually, looking at everyone that visits my office it's all four wheel drives (BMW X6's, occassional BMW X5's and the not so well off one's seem to Have BMW X3's... I'm seeing a trend here!).
Seems to be the more petrol/diesel that one can consume on the journey the higher one's status! (no wonder they're always complaining about their cars being keyed).
-- Edited by Shamus on Saturday 2nd of June 2012 08:49:49 PM
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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.
My understanding is that a courier can claim the normal 45p/25p a mile. (Only on the outward journey not the return), i guess this is still what all the other couriers do?
I have also heard somewhere that a self employed person can claim an amount for interest paid on their car HP (which is used for both personal and business), does anyone know how this is worked out?
why can the courier not claim for the return journey? Is not that as much a part of the journey as the delivery? As bookkeepers and accountants do we not claim for the full journey to and from the client site.
The second part of the question needs to be viewed in line with the first part in that you indicate that the client is charging mileage for use of their own vehicle. They cannot then run the vehicle through the business so they would not be able to claim for interest incurred.
Everything, repairs, car tax, petrol, oil, insurance, servicing, etc. is included in the 45p/25p. The exception is that your client can still claim for parking fee's (but not fines).
HTH,
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.
Thats interesting, thats just what i was told a while ago by someone on the forum, i think it was because they arent paid for the return journey, they ar only paid for the outward journey. So do you think its acceptable to claim the whole trips milage?
Your answer to the second question makes sense- i did know all the repairs, car tax, petrol, oil, insurance, servicing are for the 45p per mile but didnt realise that the interest would be, but makes sense, and just to keep it simple thats fine :)
So do you think its acceptable to claim the whole trips milage?
yes but let me just do a quick search to make sure that I'm not lieing to you (weird how this business makes you question even things that you regard as facts unless you can see it somewhere in writing from HMRC!).
<<< time passes whilst scan reading HMRC publications >>>
Right I've seen nothing in HS222 or booklet 490 to make me believe that one could not argue the return journey for a courier being a legitimate part of the necessary travel.
Open to anyone correcting my reading peculiar to couriers but to my mind the mileage rate is for there and back again.
HTH,
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.
I think the confusion arises because courier companies who subcontract owner drivers only pay them for loaded miles. This is nothing to do with the tax allowance (and will in fact become the driver's turnover).
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
You should have no problem claiming mileage allowance for both the inward and outward journeys.
With respect to the hire purchase interest, please remember that there are a number of ways of allocating the finance charge to the profit and loss account/income and expenditure account over the life of the agreement. Two of the most popular are:-
- straight line, that is interest is taken by an equal amount over each repayment; - sum of the digits, interest is front loaded to the start of the agreement.
Whichever policy you use, it may be useful to put a policy note into the accounts to explain the method used.
