after I suggested to my client to use a mileage method rate for car expenses (45p/mile for the first 10,000 mile), he asked me the question: 'Who's checking my mileage? Did I drive 5000 mile a year or 25000 mile a year?'
I ve been confused a bit... What do I need to answer him?
He is running two small businesses (around 78k turnover last year all together). Online trading business - as Ltd and consulting business - as self-employed. As per his explaining, use the car 90% for business purposes: drive to customers and get sometimes a stock from local suppliers. The car is on his own name.
Hi Luda
So hows about an intro before we start. We always ask newbies!
Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.
So what method is he using now for claim motor expenses?
How did he arrive at 90% without doing some kind of mileage check? Finger in the air??
Is he suggesting he lies to break the law and evade tax?
Consulting (apart from sounding about right for being a numpty!) - what type? How many clients/does he visit the same clients a lot? So many Qs - certainly not enough info. Or should I say - can he actually claim his mileage to go and see such clients or is this actually covered under commuting?
__________________
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
HMRC checks the mileage logs against invoices or other legitimate supporting information. They will even question where the mileage logged for a journey (a log of every journey must be kept in order to claim. at minimum. where from, where to, mileage and why) is different to the mileage that Google maps states it should be why there was a difference.
To quote Joannes phrease, sounds a complete numpty that you've got there. Only a matter of time before HMRC come knocking and when they do interest, penalties and surcharges will make the tax he believed that he had saved pail to insignificance.
Also, cheating the tax system comes under tax evasion which is governed by money laundering regulations. If you knowingly allow a client to cheat the system (or do not report such) then you could be in as much trouble as he will be.
Please supply a bit more info about yourself (as per Joannes request) so that we are able to gear replies to the right level.
Shaun .
__________________
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.
first, thanks for unexpectable fast answer. Usually most of services I used before may allow 1 to 3 days for the answer. Even longer. You are best!
I worked as a bookkeeper in one of EU countries before I came in UK 5 years ago. But not professionally. I speaking three languages and here in UK a lot of people need help in bookkeeping in their first language. So I just try to help to all who ask me for any help in this way.
Do you have such face control here? I mean if I am without qualifications I cannot use this forum?
Following up your answer I spoke with the client again. His name is Oskar. He gave me more specific info.
First business is online trading (eBay, Amazon).
He's running a company there (Ltd).
Most of job he delegates to his partner (customer support, packaging). And Oskar working with suppliers. Sometimes uses his car and his friend car to get new stock to the warehouse. This business exist 1.5 years.
Self-employed business.
Oskar also an insurance adviser and often drive to the customers within 1 - 150 miles from his home. Sometimes uses Skype for the consulting.
He is not doing exact check about percentage of driving. He explained, he just feel that consulting takes more time in driving. This business exist around 1 year. As he explained he meet minimum to 2-3 customers a day in different areas. Business is licensed by company from Scotland and he is just an agent of this company. The company provides him a lists of phone numbers, he is calling to every number and during the conversation makes an appointments to potential customers.
I passed him your questions regarding tax evade. He said that I misunderstood him first time.
As he use different cars to get to the customers, how he can prove that he drove for example 20000 miles/year? For example, his car drove 10000 miles/year and his friend car 10000 miles / year.
Sometimes his friend drove Oskar to customers. Every time Oskar takes a car from friend he pay for it.
He never think about how correctly to get it sorted in paperwork, so now all those questions.
1) how to prove millage if he uses different cars?
2) what kind of contract should be used with the person who give him a car ? (some kind of lease contract? )
Is there far enough info to get a relevant advice ?
Don't bother Julie, seems the poster only wants to talk to Joanne!
Also sounds a right bag of worms over disguised employment, but I'm done with this thread. Posters been given a road map, down to them to navigate it.
__________________
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.
Hi Shaun
I had clocked that - was choosing my words carefully before responding as I am appalled at the lack of any kind of acknowledgement to your lengthy response!#
Clearly the magic ink you used when typing means its not visible
__________________
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
first, thanks for unexpectable fast answer. Usually most of services I used before may allow 1 to 3 days for the answer. Even longer. You are best!
Hi Luda
You actually received two responses. It's rude to acknowledge one and not the other. I think you owe Shaun (Shamus) an apology.
You don't have to be qualified to ask questions, and the forum members will do their best to help. The reason we ask for a background is so we know what level to pitch the answers at, as we neither want to speak up or down to you.
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Date Journey (Office to Client X) Number of miles Then I find a monthly toal useful
There are also apps you can use which will record the journey and you select business or personal. I have a couple of clients who do this then they email me the monthly report.
However they can try to pull a fast one, as can be deemed from this email exchange from last year
Hi john
Yes I went to Cornwall to do a quote and stayed for 2 weeks while I was there lol . Yes the Cornwall one was my holiday john but the rest were for buisness
Just to advise that only genuine business miles can be claimed for. In April you recorded 671 business miles and in May 573 business miles.
I've also looked at June's and you've recorded business miles to Cornwall and back, which I'm assuming is when you went on holiday, and total mileage is over 1500. Please can you have a look at the logs for me again and indicate which journeys are business use and which aren't.
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
You dont need to be formally qualified to be a bookkeeper - it is not a protected profession in the UK, BUT you are giving advice and need to have the relevant skills and knowledge to give that advice correctly so that you are not sued.
Do you have PII insurance? If not do not offer any advice.
Are you registered for MLR (Money laundering)? If not that is a criminal offence. Do not offer advice.
Does this Oskar have an Accountant? If so - get him to spek to him now.
You havent actually answered one of my questions anyway about how does he claim his car expenses (mileage/fuel or whatever) now via both the limited/sole trader?
You say he uses his 'partner's' car for the limited company. Do you mean a fellow Director? Is this Director a shareholder? Or do you mean life partner as in girlfriend/boyfriend? You say he 'delegates' the job - so I do hope this person is properly on the books or he can be fined (etc) for not abiding by legislation.
You also then mention a 'friend'. Why would anyone borrow a friends vehicle when he clearly already has his own? Has dodgy written all over it.
You say he is paying his friend. How? How does he work out what to pay him/her? Does this friend issue Oskar with an invoice and is this person registered for tax for the income being generated from allowing his car to be used in such a way. Does this person's insurance company know he is renting out his vehicle?
Never mind the disguised employment that Shaun mentions!!
Report, dis-engage and walk away. Ethical and legal obligation!
__________________
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
thank you for all yours replies. Even if somebody feel I did not answer them directly, this is because I am not good enough in forum tools. Also if somebody might think I have to reply straight away. My apologies I did not do this. As I am working full hours a day in my main job I am able to answer on the evenings only, after I sort out all home things with children.
Not really understand Shaun's answer but seems there was no answer...
Thanks to Joanne, Julie and John for the answers without judging me.
I don't have PII insurance. I don't registered for MLR. Thank you for advice. I will bear in mind this. But as long as I do not advertise that I give any bookkeeper advices, nobody can tell I do this and tax me for this. But if people ask me about something, I just tell them my opinion. I always warn a person - an answers he get from me not professional answers. So client decides yourself how to use the information. For last 23 months I spoke with people nobody told me I was wrong. People call me from recommendations only. Please, leave this for me guys. I am here not for sorting out my working conditions. I am here just to share my thinks with experienced people and get correct answers about other people who need real help.
Does this Oskar have an Accountant? No. He did first year companys annual accounts with an Accountant. He stated it was too expensive for his small business.
Self Assessment due this year.
You havent actually answered one of my questions anyway about how does he claim his car expenses (mileage/fuel or whatever) now via both the limited/sole trader?
He did not claim them for the first year, as nobody told him how to do this. That's why he got my opinion about mileage method, found it useful, as a result I've got next questions from him.
You say he uses his 'partner's' car. I never told this. I told 'he uses a friend's car'. By 'friend' I mean just a friend - person who live in one town with Oskar and know him.
You say he 'delegates' the job... Yes. Company has 2 shareholders (business partners). Job responsibilities are separated between 2 shareholders (Oskar is shareholder and director). I do not see any issue there.
Why would anyone borrow a friends vehicle when he clearly already has his own?
Oskar has got a van. It is more convenient to drive some stock from suppliers to warehouse (warehouse = one room in the house where Oskar lives). To drive to insurance customers for 100-150, sometimes 250 miles per day with van is not so economically. Oskar just get a small low-cost car from his friends and pay for it. Is there any issue?
How does he work out what to pay him/her?- Just counting how much he spend usually with the van for 1 mile and just offer relevant (cheaper) price to low-cost car owner.
If person who receive money for driving another person somewhere do not pay tax, why Oskar should be responsible for it? That's why Oskar ask what type of agreement should be between him and low-cost car owner to keep legally all Oskar's business records?
==============
To John,
About customer email On 11 Jul 2017, at 14:24, Admin - Leger Bookkeeping
Yes, John, I completely agree with this issue - driving in one direction with different mileages seems not really believable.
If we speak about Oskar's driving to the customers, he drive in different directions every day.
==============
Apologies, guys, for my English. It is not good enough yet but I try to improve it every day.
But some of people who ask me for 'my opinion' in bookkeeping does not speak English at all. But they do a lot of businesses in this country. How do you think is it easy for them to get AT LEAST simple but correct opinion here in UK?
Sorry if I forgot somebody with my attention.
Your professional opinions would be really appreciated.
I don't registered for MLR. Thank you for advice. I will bear in mind this. But as long as I do not advertise that I give any bookkeeper advices, nobody can tell I do this and tax me for this. But if people ask me about something, I just tell them my opinion. I always warn a person - an answers he get from me not professional answers. So client decides yourself how to use the information. For last 23 months I spoke with people nobody told me I was wrong. People call me from recommendations only. Please, leave this for me guys. I am here not for sorting out my working conditions. I am here just to share my thinks with experienced people and get correct answers about other people who need real help.
You are breaking the law. Does not matter that you have spoken to people and they have not told you that it is wrong. WE ARE TELLING YOU NOW. You cannot act in such a capacity as you are without MLR cover.
There is plenty of help from Accounting and Bookkeeping professionals who are MLR registered - such clients NOT having English as their first language is not an excuse for you not to follow the laws of the UK. You could instead just act as an intreperter - your argument is invalid.
Not having MLR is a criminal offence punishable by imprisonment and a bit fat fine.
This site will not associate themselves with ANYONE who is acting illegally.
In addition Shaun has answered your question, its just perhaps that you are not understanding it.
The fact that you are still not extending any thanks, nor acknowledgement of his post nor even apologising to him personally for ignoring his comments do not encourage folk to assist you Im afraid.
We all do this for free - inbetween busy day jobs and children.
We are not here to take the place of an Accoountant for your clients.
-- Edited by Cheshire on Wednesday 17th of January 2018 08:24:52 PM
__________________
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
thank you for all yours replies. Even if somebody feel I did not answer them directly, this is because I am not good enough in forum tools. Also if somebody might think I have to reply straight away. My apologies I did not do this. As I am working full hours a day in my main job I am able to answer on the evenings only, after I sort out all home things with children.
Not really understand Shaun's answer but seems there was no answer...
Thanks to Joanne, Julie and John for the answers without judging me.
I don't have PII insurance. I don't registered for MLR. Thank you for advice. I will bear in mind this. But as long as I do not advertise that I give any bookkeeper advices, nobody can tell I do this and tax me for this. But if people ask me about something, I just tell them my opinion. I always warn a person - an answers he get from me not professional answers. So client decides yourself how to use the information. For last 23 months I spoke with people nobody told me I was wrong. People call me from recommendations only. Please, leave this for me guys. I am here not for sorting out my working conditions. I am here just to share my thinks with experienced people and get correct answers about other people who need real help.
Does this Oskar have an Accountant? No. He did first year companys annual accounts with an Accountant. He stated it was too expensive for his small business.
Self Assessment due this year.
You havent actually answered one of my questions anyway about how does he claim his car expenses (mileage/fuel or whatever) now via both the limited/sole trader?
He did not claim them for the first year, as nobody told him how to do this. That's why he got my opinion about mileage method, found it useful, as a result I've got next questions from him.
You say he uses his 'partner's' car. I never told this. I told 'he uses a friend's car'. By 'friend' I mean just a friend - person who live in one town with Oskar and know him.
You say he 'delegates' the job... Yes. Company has 2 shareholders (business partners). Job responsibilities are separated between 2 shareholders (Oskar is shareholder and director). I do not see any issue there.
Why would anyone borrow a friends vehicle when he clearly already has his own?
Oskar has got a van. It is more convenient to drive some stock from suppliers to warehouse (warehouse = one room in the house where Oskar lives). To drive to insurance customers for 100-150, sometimes 250 miles per day with van is not so economically. Oskar just get a small low-cost car from his friends and pay for it. Is there any issue?
How does he work out what to pay him/her?- Just counting how much he spend usually with the van for 1 mile and just offer relevant (cheaper) price to low-cost car owner.
If person who receive money for driving another person somewhere do not pay tax, why Oskar should be responsible for it? That's why Oskar ask what type of agreement should be between him and low-cost car owner to keep legally all Oskar's business records?
==============
To John,
About customer email On 11 Jul 2017, at 14:24, Admin - Leger Bookkeeping
Yes, John, I completely agree with this issue - driving in one direction with different mileages seems not really believable.
If we speak about Oskar's driving to the customers, he drive in different directions every day.
==============
Apologies, guys, for my English. It is not good enough yet but I try to improve it every day.
But some of people who ask me for 'my opinion' in bookkeeping does not speak English at all. But they do a lot of businesses in this country. How do you think is it easy for them to get AT LEAST simple but correct opinion here in UK?
Sorry if I forgot somebody with my attention.
Your professional opinions would be really appreciated.
All the best,
Luda
For posterity
-- Edited by Cheshire on Wednesday 17th of January 2018 08:25:52 PM
__________________
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
They do not tax you for not being registered for MLR. They imprison you! (Up to trwo years plus unlimited fine).
Your responses show a lack of knowledge of accountancy which can be a dangerous thing when offering your services to the general public whether you advertise or not.
As for there was no answer... I told you how to keep a mileage log. Warned you about the money laundering implications of tax evasion, informed you about the implications of interest, penalties and surcharges. And gave you a direct answerr to how HMRC will investigate the legitimacy of mileage claims.
As for your friend Oskar. If he thinks having an accountant is expensive just wait until he finds out how expensive not having one can become.... As indicated by Joanne, a taxmans dream client!
__________________
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.
Sometimes some posters just leave you open mouthed at how dangerous to their own financial well being and freedom there knowledge level is.
You make a good point about site association Joanne. I need to ponder that one as we have a mix of someone needing help but not realising how much they need. I may end up washing my mouth out with soap after saying this but I would actually advise this one to go and join the ICB so they she gets a structured introduction to the profession before she ends up in a legal nightmare. With immediate effect of course she must stop acting on behalf of anyone until her legal situation is resolved.
Lol. Why do we do it. Zero gratitude but still we attempt to help them.
Hope that you are well. Not spoken much recently as eye balls deep in SQL and VBA. I'm currently writing the processing that does something pretty similar to VT Accounts but on an automated basis. Real interesting stuff (well, it is if you're either Vince or myself! lol) but leaves little scope for the important things like site time.
And on that note, got to fly.
Laters :)
__________________
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.
They do not tax you for not being registered for MLR. They imprison you! (Up to trwo years plus unlimited fine).
OMGA I nearly asked if she had MLR cover, not for one moment did I think she wouldn't have.
And on that note, got to fly.
Well they do say Red Bull gives you wings
LOL John
__________________
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.
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 Luda You were on here for a good hour after later on yesterday evening, you've been on twice this morning already and yet there is still no apology to Shaun!!
I wonder why you singalled him out.
Not the right way to influence people, especially when he is the moderator.
Edited for typo
-- Edited by Cheshire on Thursday 18th of January 2018 12:50:06 PM
__________________
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
