I have a CIC client who claims mileage. She appears to have had an accident while on a business trip, and has been re-imbursed £300 by the CIC - which may be the repair costs or the insurance excess. I mentioned that this should be a personal costs, but both directors insist that the expense stays in the accounts. Now if that's what they want, that's fine - its their choice to argue with HMRC, if they get an investigation.
But I was just wondering -
Is there is any specific legislation that clearly states its not a business expense, even though it was a business trip
or
Is it possible I am wrong, and it can be considered a business expense?
Hi
CIC aside, sounds like having their cake and eating it! The mileage is supposed to cover the cost of using her car surely. This would then just be like the company also paying for her MOT and service costs?! What we dont know is - is she claiming from someone else's insurance and then if there is any 'gain' from that would she be putting that into the CIC? I reckon not. The only way, to my mind, that a payment of £300 for repair costs or an excess would be if the company pay for commercial vehicle insurance and then that payment would go to the repair garage or insurance company direct and not to her.
Now add back in the CIC - are they actually in the best interest of whatever 'community group' this was set up for? I assume that this CIC doesnt have other members who would vote on this so that leaves you with only being able to persuade them of their mistake. Just my opinion - sorry not had a look for any case law!
There is of course the possibility vicarious liability against the CIC by the other party.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
My thoughts exactly! HMRC would probably take the view that an accident is caused by human error, and that the car repaired is not a business asset. If the accident had been caused by the other party, and any pay-out received, I am guessing she wouldnt have introduced it to the business, even it had been a business trip... I think that's what I will have to say to her, in an email. I just wondered if there was anything specific out there, that made it clear - so I could quote legislation at her. Was hoping Shaun's legislation amazingness might find something!
