Business mileage accounting

[StephenJ1979]

I use Zoho books to do my bookkeeping and record my mileage, however, I'm a little confused as to how it records this, or how I should be recording it.

I have it recorded one of 2 ways
1. It shows the business miles as PAID THROUGH "bank account" which I have
2. It shows the business miles as PAID THROUGH "Drawing"

I don't keep receipts for fuel purchases, and use my car for business and pleasure. Although I do use the bank account to buy fuel - the mileage is a mix of business and pleasure.
I keep a log of business miles, and add this to the bookkeeping software.

Is "drawing" the correct way to record this or should it be shown as coming from the "bank account"?

 

[Scalloway]

Fuel you buy should be posted to Drawings as it is not for business purposes,
If you record business mileage but do not pay it out to another bank account it goes to reduce drawings.
If you record business mileage and pay it out it is a bank payment.

Do you reconcile your bank statements with your Zoho accounts?

 

[StephenJ1979]

Fuel you buy should be posted to Drawings as it is not for business purposes,
If you record business mileage but do not pay it out to another bank account it goes to reduce drawings.
If you record business mileage and pay it out it is a bank payment.

Do you reconcile your bank statements with your Zoho accounts?

Thanks for your reply.
Yeah, i just use the same debit card for fuel payments from a personal account as 60% of my mileage is for personal use.
So, the correct way to show this is against the bank account I make fuel payments for the recorded mileage?

 

[Scalloway]

If you are paying for fuel from a personal account then the business account should refund you the mileage payments.

 

[Paul Kelly ICHYB]

You can only claim a mileage allowance if you pay for the fuel (?)!

If you are paying for fuel from a personal account then the business account should refund you the mileage payments.

Maybe the question is 'how do I claim VAT on fule used for business miles'? (Assuming you are VAT registered).

 

[MyAccountantOnline]

I use Zoho books to do my bookkeeping and record my mileage, however, I'm a little confused as to how it records this, or how I should be recording it.

I have it recorded one of 2 ways
1. It shows the business miles as PAID THROUGH "bank account" which I have
2. It shows the business miles as PAID THROUGH "Drawing"

I don't keep receipts for fuel purchases, and use my car for business and pleasure. Although I do use the bank account to buy fuel - the mileage is a mix of business and pleasure.
I keep a log of business miles, and add this to the bookkeeping software.

Is "drawing" the correct way to record this or should it be shown as coming from the "bank account"?

I assume from your post that you are a sole trader using Simplified expenses https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles

If that's the case when you buy fuel from the business account my advice is to allocate it to drawings ie paid from the business bank account but treat it as a private expense so that you dont 'double count' your expenses. If you are claiming simplified costs you cant claim tax relief on fuel or other vehicle running costs as well. So the correct option is neither of the options you've listed.