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matt123


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Mileage for asset purchases.
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Had a conversation with a fellow accountant lately about mileage when an employee collects and asset using personal vehicle.

For example, director of limited company collected a slush machine. Approx 200 mile round trip. Machine was £1500 so I calculated 200x.45p giving me £90. Put the asset in the accounts @ £1590 and claimed capital allowances at this amount.

His opinion was to put in accounts @£1500 and claim £90 as motor expenses. Both get the same in terms of tax relief but I'm just curious how others would record it?



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Matthew
Artois


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Hi Matthew

I would expense the £90 and claim CA on the £1500 cost of the asset

 

 

EDIT to change Matt to Matthew as I was on my phone earlier and could not see the signature, so apologies 



-- Edited by Artois on Thursday 21st of June 2018 01:22:56 PM

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Doug

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Leger


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lHi Matthew, long time no see. smile

I have to agree with the other accountant and Doug.  The mileage is P&L surely.  Like you say tax wise the outcome is the same but depreciation wise you'd also be depreciating the mileage part.



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matt123


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Been quite busy lately - not on accounting stuff oddly enough!

I had always put all costs of getting an asset to working condition in it's intended place of use. That would include delivery and installation costs if the director had paid someone to deliver it so I assumed it would be the same for the cost of him delivering it.

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Matthew
Leger


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Hi Matthew

Yes I see where you're coming from. What do others think?



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John 

 

 

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Shamus


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I'm with Matthews initial approach in that all costs incurred in bringing an asset to the location and condition and use should be capitalised as part of the cost of the asset.

For larger companies take a look at IAS16.

For micro entities, FRS105, section 12.9

In FRS102 its section 17.10

There's no scope in any of them for alternative treatment. Of course, for ME's the likelihood is that AIA will cover the full cost so there's no deferment of return through capitalisation.

As I say, I believe that Matthew is right.

HTH,

Shaun.

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Artois


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Leger wrote:

Hi Matthew

Yes I see where you're coming from. What do others think?

Yes I do agree that normal practice would be to capitalize all costs involved in bringing the asset into use and that includes delivery and installation so would have to have a change of view and go with Matthew on this

 

 



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Doug

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Cheshire


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Surely the accounting treatment comes first, rather than the tax treatment, so I concur that Matt is correct.

Also look at IAS19 on the salary and expenses front for larger companies (inclusions and exclusions), if I recall correctly.

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matt123


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Thanks for the replies. A bit of relief that some agree with my method. was quite worried that I was the only person doing it that way!

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Matthew
Robbi46


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edited **wrong link**



-- Edited by Robbi46 on Friday 22nd of June 2018 02:13:50 PM

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Rob :) 
Casu


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matt123 wrote:

Thanks for the replies. A bit of relief that some agree with my method. was quite worried that I was the only person doing it that way!

 i would do it the way you have



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