Corporation Tax and Milage

LinuxAllTheWay

Hello,

Need a bit of help to get my head around a couple of concepts.

Firstly, I have a small ltd company with three directors (myself included). Turnover is around £5k. We are therefore not VAT registered. We do incur business mileage.

Mr O announced yesterday that Corporation Tax was coming down by not 1% as originally planned but 2% and the 1% in subsequent years. Will this reduction also apply to small profit businesses? i.e. will Our CT liability drop to 19% in April then 1% per annum for the next three years?

My second question relates to business mileage claims. We're starting to incur mileage claims in the course of running our company. Now this rate has gone up to 45p per mile for the first 10k miles can this 45p per mile be offset against corporation tax? If not the whole 45p, how much if any?

Please let me know if you need any further information regarding the above.

Thanks for your time,

Richard

chalkie99

No, the small business rate is still only coming down 1% to 20% as was due to happen anyway.

You would normally claim your mileage as an employee as an expense but with a T/O of only 5k and 3 directors I assume you are not actually getting a wage yet?

LinuxAllTheWay

Thanks for replying Chalkie,

Shame the SBR isn't changing. Every little helps as they say.

No, we're not taking a wage, rather small dividend payments from the post tax profit.

I am reluctant to say what the Ltd company does on this board as I don't want to be seen as trying to advertise. Basically, we get paid cash lump sums on a near weekly basis. This money is paid in to our business bank account and the CT moved to a savings account.

We have repairs and reimbursables that I will be taking off of the CT bill but was interested to know if our mileage claims can also be taken off the CT.

The company runs from a registered office (my house) but as we have no stock etc we do not need bona fide 'office premises'.

Any other CT saving advice would be more than welcome.

Again, happy to answer any (well almost any) questions.

Rich

chrismac1

Yes the mileage is fine, keep good records of journeys by date. The other obvious one from your post is to charge the company a reasonable rent for the use of your premises.

LinuxAllTheWay

Thanks chrismac. Good idea. £100pa or so should be reasonable enough I would think.

chrismac1

£3 per week is no questions asked from HMRC. £156 per year.

LinuxAllTheWay

Nice one!!