Just taken on a new client and a relative has submitted previous return, although the summary is laid out very neatly and properly. I've been asked to submit 19-20 return and notice that previously £200 a month has been claimed for the vehicle. I asked my client for the paperwork as I was considering looking at AIA or Capex. Unfortunately the vehicle finance (HP) is in the spouses name. I'm going to look at the mileage option (I have breakdown for the last two years) and hopefully it will cover the motoring costs, but just double checking first
A. You can't just claim the £200 a month (or can you if cash accounting?) and B. It would need to be in clients name anyway.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
As I am sure you are aware the 2019/2020 return is well late!
If the previous returns have already claimed vehicle expenses then you will be unable to swap to mileage until the vehicle is changed, no reason why you cannot claim the £200 per month as it is still an expense (proof of payments?) to your client however this may create a problem for the spouse, they are then in effect receiving income for renting the vehicle out and although this would be offset against the HP payments so no profit could HMRC argue that the spouse is not trading as a rental business and seek to disallow?
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
As I am sure you are aware the 2019/2020 return is well late!
If the previous returns have already claimed vehicle expenses then you will be unable to swap to mileage until the vehicle is changed, no reason why you cannot claim the £200 per month as it is still an expense (proof of payments?) to your client however this may create a problem for the spouse, they are then in effect receiving income for renting the vehicle out and although this would be offset against the HP payments so no profit could HMRC argue that the spouse is not trading as a rental business and seek to disallow?
Yes, I'm aware One of the reasons they have come to me I think, they are keen to get the return done, as they have been fobbed off by the previous person. All I've seen so far is the figures for 18-19 and I'm just awaiting authorisation to check the previous return. I had hoped to alter the previous tax return to mileage ideally, but forgot that I'm past the deadline. There is no income for 20/21 and they no longer have the vehicle so I'll just have to treat it as it is and let the spouse sort their side out themselves.
Thanks Doug
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
One of the reasons they have come to me I think, they are keen to get the return done, as they have been fobbed off by the previous person. All I've seen so far is the figures for 18-19 and I'm just awaiting authorisation to check the previous return. I had hoped to alter the previous tax return to mileage ideally, but forgot that I'm past the deadline. There is no income for 20/21 and they no longer have the vehicle so I'll just have to treat it as it is and let the spouse sort their side out themselves.
