LTD Milage and fuel..

Discussion in 'Accounts & Finance' started by Edisoneb, Jul 9, 2019.

  1. Edisoneb

    Edisoneb UKBF Newcomer Free Member

    15 0
    Just wondering if anyone can help regarding milage and fuel expenses/VAT for LTD company.
    We have 2 vehicles owned by the company one is a large car and one van, we claim VAT back on fuel on these and log it as an expense but what I’m a bit stuck on is subcontractors using their own cars. Some of the work were getting is over 200 mile away so the company fill subcontractors vehicles for them to get to work, can these be logged in the same way or not? Should we be claiming milage just and not fuel?
     
    Posted: Jul 9, 2019 By: Edisoneb Member since: Jul 3, 2019
    #1
  2. WaveJumper

    WaveJumper UKBF Enthusiast Free Member

    564 98
    I am not an accountant and sure one will be along soon, but if they are subcontractors using their own vehicles surely they should be claiming for their own travel expenses?

    I am sure we will be put right very soon :)
     
    Posted: Jul 9, 2019 By: WaveJumper Member since: Aug 26, 2013
    #2
  3. Edisoneb

    Edisoneb UKBF Newcomer Free Member

    15 0
    Thanks you :)

    Yeah this is what I’m thinking. It’s just for longer distance we have been filling up cars so wondered if there was anything we can do with this.
     
    Posted: Jul 9, 2019 By: Edisoneb Member since: Jul 3, 2019
    #3
  4. DWS

    DWS UKBF Contributor Free Member

    91 11
    How do you account for any private use of the fuel you provide?
     
    Posted: Jul 9, 2019 By: DWS Member since: Oct 26, 2018
    #4
  5. Scalloway

    Scalloway UKBF Legend Free Member

    14,923 3,167
    It is a cost of you doing business with them. They could charge you a higher mileage rate instead.

    As they are self employed contractors I don't think that matters to the OP
     
    Posted: Jul 9, 2019 By: Scalloway Member since: Jun 6, 2010
    #5
  6. DWS

    DWS UKBF Contributor Free Member

    91 11
    If the OP is claiming the total cost of the fuel as an expense to themselves then I suggest that it would matter unless of course the amount is included as payment to the subby in which case if they are under CIS then the correct rate of tax should be deducted as well
     
    Posted: Jul 9, 2019 By: DWS Member since: Oct 26, 2018
    #6
  7. Edisoneb

    Edisoneb UKBF Newcomer Free Member

    15 0
    Would the subcontractors be better of invoicing me for an amount as an expense? As I say this is only for the 1 or 2 groups we have who have to travel around 100 mile, we also pay for the accommodation for them to stay while they are working.
    We can’t really account for any personal miles.
     
    Posted: Jul 9, 2019 By: Edisoneb Member since: Jul 3, 2019
    #7
  8. Clearaccy

    Clearaccy UKBF Contributor Free Member

    97 13
    Yes you should pay them mileage at an agreed rate per mile.
     
    Posted: Jul 9, 2019 By: Clearaccy Member since: Apr 11, 2017
    #8
  9. DWS

    DWS UKBF Contributor Free Member

    91 11
    I would suggest that they include in their total of the Invoice to you an agreed amount for fuel, you will be no worse off as you can claim the total of their Invoice as an expense and they can also claim an expense within their own accounts, using the same method that they previously used for the vehicle which would be either actual expenses or the mileage rates.
     
    Posted: Jul 10, 2019 By: DWS Member since: Oct 26, 2018
    #9
  10. Edisoneb

    Edisoneb UKBF Newcomer Free Member

    15 0
    Thanks for the replies. At the moment they don’t invoice us we pay them an agreed day rate less CIS and supply them with monthly pay slips. As it’s only 1 subcontractor using their car at the moment will get him to invoice me for that anount, no CIS would come into it am I right?
    Does he need to show the journey in it or can it just say X amount of miles?
    Thanks
     
    Posted: Jul 10, 2019 By: Edisoneb Member since: Jul 3, 2019
    #10
  11. Edisoneb

    Edisoneb UKBF Newcomer Free Member

    15 0
    Also... could this be withdrawn and given to them as cash or is bank transfer always better?
     
    Posted: Jul 10, 2019 By: Edisoneb Member since: Jul 3, 2019
    #11
  12. DWS

    DWS UKBF Contributor Free Member

    91 11
    You can pay them any amount that you both agree on but you will need to deduct CIS at the correct rate as fuel does not count as materials.
     
    Posted: Jul 10, 2019 By: DWS Member since: Oct 26, 2018
    #12
  13. Edisoneb

    Edisoneb UKBF Newcomer Free Member

    15 0
    Ah okay thanks. So they can invoice me for say £40, and I can just class this as an expense rather than having to track their milage?
     
    Posted: Jul 10, 2019 By: Edisoneb Member since: Jul 3, 2019
    #13
  14. DWS

    DWS UKBF Contributor Free Member

    91 11
    You would just include it as a payment to the subby and put it on their monthly deduction statement.
    They will account for the fuel they paid for in their own accounts.
     
    Posted: Jul 10, 2019 By: DWS Member since: Oct 26, 2018
    #14
  15. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,558 759
  16. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,558 759
  17. DWS

    DWS UKBF Contributor Free Member

    91 11
     
    Posted: Jul 10, 2019 By: DWS Member since: Oct 26, 2018
    #17
  18. Edisoneb

    Edisoneb UKBF Newcomer Free Member

    15 0
    So technically if I’m happy that the Amount of fuel I put in their vehicle would only do for work then I’m okay to do it that way, and claim the VAT back on fuel receipts? I can’t prove they wouldn’t be using it for personal miles however I’m satisfied that it would be very very little left to do so if they did.
     
    Posted: Jul 10, 2019 By: Edisoneb Member since: Jul 3, 2019
    #18
  19. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,558 759
    private use is not a problem as not an employee. I don't think for one minute HMRC would query it on a PAYE compliance visit.

    In 30 years I haven't known them to query fuel use in company accounts. The only thing questioned is private use of fuel for company car drivers by employees/Directors.
     
    Posted: Jul 10, 2019 By: UK Contractor Accountant Member since: Sep 18, 2013
    #19
  20. DWS

    DWS UKBF Contributor Free Member

    91 11
    As long as you are happy that what you pay is correct and you can back this up then fine, but I would still advise you to get the sub-contractors to pay and Invoice you for it
     
    Posted: Jul 10, 2019 By: DWS Member since: Oct 26, 2018
    #20