How do I show this in accounts?

[Walker1]

Sorry this is a very basic question.

I have a vehicle that I use for both business and pleasure. I keep a mileage sheet and use a percentage to work out the petrol claimed.

If I have a receipt for £15.00 and this payment has gone through my business account how do I show that I only want to claim 33% of this receipt.

 

[Scalloway]

You have two options for vehicle costs if you are a sole trader. You can put all your costs through your business and deduct personal use. The simplest way to account for personal use when you do your tax return by deducting the personal use from the total cost for the year.

You also have the option of charging the business 45p per business mile and treating costs paid by the business as drawings.

 

[kevin.doran]

As above, you have two options and i'd say 90% of the time in my experience you'll find mileage is the more beneficial - and the simplist by a long shot!

I'm presuming this is your first year of trading?

 

[Blackberry]

But you can only use a mileage claim if your turnover is under the VAT registration threshold and or if not registered for VAT voluntarily.

if you are VAT registered you have to use your actual motors costs rather than a mileage claim

Also you cannot just switch between the two methods, e.g. if you have been using the actual costs method you cant just start using a mileage claim now, you can change from one method to the other but only at the point that you change your vehicle

 

[Scalloway]

According to this any sole trader or partnership can use it from 2013/14 onwards.

https://www.gov.uk/simpler-income-tax-simplified-expenses/overview

 

[andygambles]

if you are VAT registered you have to use your actual motors costs rather than a mileage claim

I wasn't aware of this?

I use my personal vehicle for business use and claim mileage based on HMRC mileage allowances (45p for first 10k miles). I have done for years and I have a VAT registered limited company. During my last VAT inspection the inspector even said I could claim back the VAT element of the mileage as long as I attached a fuel receipt.

 

[Scalloway]

if you are VAT registered you have to use your actual motors costs rather than a mileage claim

I don't think that's correct

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/manuals/bimmanual/bim47701.htm

Taxpayers can compute their expenses using a fixed rate per business mile if the annual turnover of their business is less than the VAT registration threshold when they first use the vehicle.

We use the VAT registration threshold as a convenient limit whose real value is regularly reviewed. Our practice has no application to VAT accounting and does not affect existing VAT rules and practices. The use of the VAT registration threshold may be reviewed if there is an increase in the threshold substantially in excess of the rate of inflation.

Taxpayers can only use the mileage rate basis if they apply it consistently from year to year. They can only change to or from an ‘actual' basis when a vehicle is replaced.

If the turnover of the business increases and exceeds the VAT registration threshold, then the taxpayer should continue to use the mileage rate basis until the vehicle is replaced.

If there is a change in the VAT threshold, then the taxpayer should continue to use the same basis until the vehicle is replaced.

 

[Billmccallum]

I did some work as a self employed consultant last year, lots of mileage involved, they insisted on vat receipts even though I was not VAT registered, they still wanted to claim back the VAT.

After discussion with HMRC it was clear they could not claim the VAT, after I told them they terminated the contract.....

 

[UK Contractor Accountant]

I wasn't aware of this?

I use my personal vehicle for business use and claim mileage based on HMRC mileage allowances (45p for first 10k miles). I have done for years and I have a VAT registered limited company. During my last VAT inspection the inspector even said I could claim back the VAT element of the mileage as long as I attached a fuel receipt.

Thats the correct way to do it for ltd co- you can clain the vat on fuel element of the mileage rate claimed. The vat threshold figures relates to sole traders using the mileage rates instead of actual costs.