Mileage claims

Discussion in 'Accounts & Finance' started by IR-Old, May 5, 2011.

  1. IR-Old

    IR-Old UKBF Newcomer Free Member

    Posts: 18 Likes: 3
    I've a couple of questions regarding mileage claims. I put one to the friendly people at HMRC but since they haven't replied in over a month I've given up.

    Myself and a partner run a limited company. We do quite a bit of mileage and are looking to reclaim the VAT on the petrol only element. I've created a spreadsheet to calculate the VAT element of the costs but....

    i) ... I've read on the HMRC website (hmrc.gov.uk/rates/travel) that if you are carrying a passenger you can claim an additional 5p (that's my interpretation). Given the current rate is 45p, does that mean that if myself and my colleague travel together we can claim 50p?

    ii) When raising the expense claim in our accounting software (Clearbooks), how should we handle the VAT element? If we've completed a journey of 100 miles with a mileage claim of £45 (no passenger!?) and a VAT element of £3.20 then do we need to raise a claim of £41.8 with £3.20 VAT? That way the individual get's their £45 and we can claim back the £3.20?

    Thanks

    Ian
     
    Posted: May 5, 2011 By: IR-Old Member since: Oct 27, 2010
    #1
  2. DFL Accountants Ltd

    DFL Accountants Ltd UKBF Newcomer Free Member

    Posts: 62 Likes: 4
    Hi

    Answer:

    i) If taking a passenger also on business then the driver can reclaim an extra 5p per mile.

    ii) Assuming you have calculated the VAT correctly based on the fuel element of the mileage then your method of claiming sounds correct.
    - NB: You should also attach a garage fuel VAT receipt to your mileage claim records - this does not need to be from the exact day of travel but close enough before that it could cover the fuel used.

    Kind regards
     
    Posted: May 7, 2011 By: DFL Accountants Ltd Member since: Apr 9, 2010
    #2
  3. garlex

    garlex UKBF Newcomer Free Member

    Posts: 139 Likes: 22
    Your claim is on the company through travelling expenses, you don't need to get the tax man involved at this stage. Just keep a book with your journeys to and from, including customers, suppliers or whoever or whatever you travelled to. This includes toll charges and parking provided these are for business and can be backed up if a visit from HMRC is conducted at some time in the future.
    Yes, you charge an extra 5p for a passenger provided the passenger is legitimate and can be proven to have been a passenger at the time if necessary.

    As you are making the claim for using your car for business, you personally are not VAT registered so this does not come into the equation. the 45p is for ware and tear as well as petrol eat so it would be impossible to work out a VAT element anyway.

    Best way is to add up the total once a month and put it through under travel expenses prior to each month end.
     
    Posted: May 7, 2011 By: garlex Member since: Jan 11, 2011
    #3
  4. Atilla

    Atilla UKBF Newcomer Free Member

    Posts: 1,071 Likes: 192
    You sure??
     
    Posted: May 7, 2011 By: Atilla Member since: Aug 25, 2008
    #4
  5. SabreEnergy

    SabreEnergy UKBF Newcomer Free Member

    Posts: 29 Likes: 3
    Who owns the vehicles and pays the running costs? As I understand it If you own the vehicles and pay the running costs (i.e. Petrol etc) then you can claim the mileage allowance. If the company owns them then you can't.
     
    Posted: May 7, 2011 By: SabreEnergy Member since: Nov 3, 2008
    #5
  6. Rolo Tomasi

    Rolo Tomasi UKBF Regular Free Member

    Posts: 150 Likes: 33
    The joy of these forums is that you can end up being even more confused!!

    Of course you can reclaim VAT on the fuel element of the mileage claim. You have to approach this with two hats on:


    1. As the employee, you submit an expenses claim to the company at either 45ppm or 50ppm depending on whether or not you had a passenger. This claim does not make any mention of VAT but you should attach a fuel receipt as advised earlier.
    2. As the company, when you input this claim into your bookkeeping system you need to calculate the amount of VAT you can reclaim. If the fuel element is 14ppm then the VAT included in this would be 2.3ppm so a claim for 100 miles would include VAT of £2.30
     
    Posted: May 7, 2011 By: Rolo Tomasi Member since: Nov 19, 2009
    #6
    • Thanks Thanks x 3
  7. Atilla

    Atilla UKBF Newcomer Free Member

    Posts: 1,071 Likes: 192
    Thank you, just as i understood it.
    No need to redo my accounts afterall.
     
    Posted: May 7, 2011 By: Atilla Member since: Aug 25, 2008
    #7
  8. SabreEnergy

    SabreEnergy UKBF Newcomer Free Member

    Posts: 29 Likes: 3
    And I've learnt something too. Now where did I put those old petrol receipts? :redface:
     
    Posted: May 7, 2011 By: SabreEnergy Member since: Nov 3, 2008
    #8
  9. IR-Old

    IR-Old UKBF Newcomer Free Member

    Posts: 18 Likes: 3
    ... therefore, am I right in thinking the book-keeping software would have a claim of £42.70 + £2.30 VAT for a 100 mile journey (at 45p/mile) (no passenger).

    Many thanks for the rest of the feedback, really useful to get that confirmed.
     
    Posted: May 7, 2011 By: IR-Old Member since: Oct 27, 2010
    #9
  10. smooreaccountancy

    smooreaccountancy UKBF Newcomer Free Member

    Posts: 8 Likes: 0
    Re: the 50p/m, I'm under the impression (after discussions with HMRC) that the passenger has to be an employee of the business too in order to claim the extra 5p.

    So, you and business partner going somewhere together is fine, but you and a client going somewhere (say to a site) is only at 45p/m
     
    Posted: May 7, 2011 By: smooreaccountancy Member since: Sep 5, 2010
    #10
  11. garlex

    garlex UKBF Newcomer Free Member

    Posts: 139 Likes: 22
    Yes. It's your vehicle not the company's so you are claiming for the running of your car which is allowable. You are not claiming for the petrol 'per se' in this instance, so VAT does not figure in your claim!
    The company claims any vat as they are vat registered presumably.
     
    Last edited: May 8, 2011
    Posted: May 8, 2011 By: garlex Member since: Jan 11, 2011
    #11
  12. Atilla

    Atilla UKBF Newcomer Free Member

    Posts: 1,071 Likes: 192
    But that's exactly what the OP was alluding to (as i read it). Your earlier post suggested no VAT reclaimable.
    What can the individual claim (him) and what can his company claim.
    Two seperate issues but both pertinent to the OP.
     
    Last edited: May 10, 2011
    Posted: May 10, 2011 By: Atilla Member since: Aug 25, 2008
    #12