Using parent's van - can they claim any expenses?

[Peasie]

Query on behalf of a bookkeeping client.

They do not have their own vehicle and currently they pay their father for the use of his van. The cash and carry is about 22 miles away and currently they pay him £15 which seems a reasonable amount there and back. They are above the VAT threshold.

Can they claim this £15 (three times a week) as an expense?

If they can, can they claim any VAT back on the fuel element - or is that a non-starter as they can't use the mileage method anyway. They have kept a pile of diesel receipts.

 

[Newchodge]

Without being an expert, presumably they can claim for the van rent, as long as the parents declare it as income!

 

[dal]

£15 sure with an invoice. I don't think so on the vat, the vehicle needs to be assigned to the company I think, but they can claim the mileage rate http://www.hmrc.gov.uk/rates/travel.htm I think.

 

[David Griffiths]

but they can claim the mileage rate http://www.hmrc.gov.uk/rates/travel.htm I think.

Not so sure about that. The OP hasn't said if it's a company or a sole trade, but the allowances for a company apply to payments for the use of an employee's own vehicle - not a borrowed one. Similar comments in a sole trade.

Completely separate, I'd be concerned about the validity of the van's insurance in the circumstances described.

 

[Peasie]

It is a sole trader.

 

[roydmoorian]

It is a sole trader.

Who is ? Your client or his / her father ? And are they both VAT registered with different VAT numbers ? And is the van insured for hire & reward ? Does the £15 include fuel or does the borrower put enough fuel in for his / her use.

Why not keep it simple and just put an extra £15 worth of fuel in over and above the usage each time to the Cash & Carry and claim the VAT back on that.

 

[Peasie]

The client is a sole trader. The father is probably retired (+) just helping out his daughter.

Now if the father were a non-VAT registered sole trader and declaring this "income" he could claim 44 x 45p back. At £15 he isn't profiting - he's just helping someone out.

So basically, the £15 each time is just drawings if she can't claim this as expenses?

(+) I know even retired people still have to do tax returns.