I have worked out I am going to do roughly 150 miles a week visiting my regular clients
How can I claim this back and how would it go through sage? I know the 0.45p per mile would be more beneficial to me then just putting in a receipt for say,£30, which would cost me in fuel a week0.45p per mile x 150 = £67.50,a week it would be worth to me. So for example, at the end of the week I get a figure of £300 from all my clients, do I just make a bank payment of the £67.50 to the nominal code of fuel costs? 7300 range, and withdraw myself ? Obviously I will log what mileage I use on a weekly/daily basis and will still keep the receipts.
Would the above be ok? Just want to add that I am a sole trader
Also,how would I show on sage my working from home expenses, I will be using the £4 a week principle, again just make a payment to nom code (suggestions which one would be great) and then withdraw myself?
thank you
-- Edited by jaybag on Saturday 24th of May 2014 01:29:30 PM
-- Edited by jaybag on Saturday 24th of May 2014 01:35:17 PM
DEBIT : Motor Expenses (7304)
CREDIT : Capital introduced (3001)
DEBIT : Use of home as office (7802)
CREDIT : Capital introduced (3001)
are the journals I use. I don't know if these are the ones that were already there or I just invented them for my own use. Then any actual cash spent on motor expenses I put down as Drawings (3002).
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Never buy black socks from a normal shop. They shaft you every time.
DEBIT : Motor Expenses (7304) CREDIT : Capital introduced (3001)
DEBIT : Use of home as office (7802) CREDIT : Capital introduced (3001)
are the journals I use. I don't know if these are the ones that were already there or I just invented them for my own use. Then any actual cash spent on motor expenses I put down as Drawings (3002).
Sorry, bit confused why would it be shown as capital introduced? Wouldn't it be just a payment to whichever code (7304 or 7802)? as the figure I will need will taken from the bank account (forgive me if that is a really silly question)
My figures don't go anywhere near the bank account as no physical cash is being used in relation to motor expenses when going down the 45p/mile method. The bank balance isn't being reduced.
That's why when physical cash is used to pay for these they are put down as Drawings.
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Never buy black socks from a normal shop. They shaft you every time.
My figures don't go anywhere near the bank account as no physical cash is being used in relation to motor expenses when going down the 45p/mile method. The bank balance isn't being reduced. That's why when physical cash is used to pay for these they are put down as Drawings.
I see. The way I have suggested would still be ok to use?
Say,when I am making a payment against the bank for drawings,of £300 for the week,I can put a figure of this against the 7000 codes?
Your way could not mention drawings Jay otherwise the flip side of the transaction being related to motoring expenses would be lost (as your approach misses a step out).
Persoanlly I'm with Peasie's approach to this which is both simple and keeps everything properly recorded for the accounts exactly as you will have done with your clients.
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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.
So in turn you putting cash back in to pay the expense but showing it as capital introduced.
Great, I understand now. Thank you for your help, both of you
Will you always be in a position to take the money straight from the bank? What if your clients are slow paying one month, or you have some heavy capital expenditure, and leave the money in the business? If the mileage claim and the payment are separate transactions, you can post the entries in a consistent way.
So in turn you putting cash back in to pay the expense but showing it as capital introduced. Great, I understand now. Thank you for your help, both of you
Yes. Appart from as Peasie indicates, the cash introduced is virtual (the business owing you 45p a mile for the first 10k) but the cash withdrawn in drawings is real.
And, as indicated by John, Peasie's approach keeps the accruals sweet wihout any extra effort.
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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.
This is where I had a disagreement on the other forum in the past. Some people only post it at the end of the year. For clients I post them monthly so they can compare months on the management accounts.
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Never buy black socks from a normal shop. They shaft you every time.
If you have Sage, you could set yourself up as a supplier and create a monthly invoice for your mileage claim, use of home, and any other expenses you have paid privately.
Then, when you can pay yourself, you can just clear the invoice(s) through the bank as normal.
Any balance owing to you on the last day of the financial year should technically be shown on your capital account, but, your accountant should adjust this at the year, on the face of the accounts. You wouldn't need to adjust Sage. If you are doing the accounts, come back and ask us, when the time comes :)
If you are VAT registered, you cant claim VAT on all of the mileage, or any of the use of home. Mileage VAT rates are set by HMRC. If you are VAT registered and need help with that, let us know.
