self assessment help

hariboh

Hi All

In January 2010 the car my husband used for solely subcontracting in the construction industry went in to get repaired and was going to cost about £1800 to repair. My mother who was buying a new car said he could buy her old car from her and pay her £50 per week as work had hit rock bottom but without transport he couldnt do any.

He transfers the £50 per week directly into her bank by standing order, can these payments be put through his business? and if so what do they get put under.

Also if im submitting 2010-2011 return is fuel 45p per mile or 40p per mile?


Thanks

harryhound

Starting at the bottom first it is 40p a mile for the first 10K miles for 2010/2011 and that is meant to pay all the costs of owning & running a private car.
Mum's car will make no difference unless he wants to get involved in registering it in the name of his business and putting all the actual figures through the business accounts.
Perhaps a Van might be more appropriate as it is only used for work?

For years from 2011-12

Tax - Rates per business mile
Type of vehicle First 10,000 miles Above 10,000
Cars and vans.......... 45p................... 25p
Motorcycles ............ 24p ...................24p
Cycles..................... 20p ...................20p

So if an employee travels 12,000 business miles in their car or van, the approved amount for the year would be £5,000(10,000 x 45p plus 2000 x 25p).
Note that you must count an employee's business mileage in all vehicles of the same type together (eg, all cars or all motorcycles they use for business during the tax year).
So if an employee changes their car or van, they don't start a new 'first 10,000 miles'.

dori2o

harryhound wrote: »

Starting at the bottom first it is 40p a mile for the first 10K miles for 2010/2011 and that is meant to pay all the costs of owning & running a private car.
Mum's car will make no difference unless he wants to get involved in registering it in the name of his business and putting all the actual figures through the business accounts.
Perhaps a Van might be more appropriate as it is only used for work?

For years from 2011-12

Tax - Rates per business mile
Type of vehicle First 10,000 miles Above 10,000
Cars and vans.......... 45p................... 25p
Motorcycles ............ 24p ...................24p
Cycles..................... 20p ...................20p

So if an employee travels 12,000 business miles in their car or van, the approved amount for the year would be £5,000(10,000 x 45p plus 2000 x 25p).
Note that you must count an employee's business mileage in all vehicles of the same type together (eg, all cars or all motorcycles they use for business during the tax year).
So if an employee changes their car or van, they don't start a new 'first 10,000 miles'.

Completely irrelevant for a SOLE TRADER.

See here (page 10 onwards)

http://www.hmrc.gov.uk/worksheets/sa103f-notes.pdf

harryhound

Mileage allowance method

HM Revenue and Customs permits self-employed people to claim a fixed mileage allowance for all business mileage travelled as an alternative to apportioning total costs. Once this method has been chosen, the business should normally continue with it during the life of the vehicle. Details of the method are given at
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47702.htm and
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47701.htm
This method will allow most self employed workers to claim 40p per business mile travelled in a car or van (based on figures for the 2010-11 tax year: 40p for the first 10,000 miles and 20p thereafter).
Ideally you should keep a note of all business journeys, so that you can demonstrate evidence of the number of miles which you have claimed in each tax year.
In the absence of a log, it may be possible to estimate the business mileage by taking the annual mileage of the vehicle (e.g. from MOT certificates) and applying a percentage of estimated business use. So if the car does 10,000 miles per annum and you can demonstrate (perhaps over a sample period of 3 or 4 weeks) that 30% of the use is for business purposes, then you may claim 3,000 (10,000 x 30%) miles @ 40p per mile = £1,200 for the use of the car.
The mileage allowance method cannot be claimed by those whose business income (before expenses) exceeds the VAT threshold (£70,000 in 2010/11).
See http://www.hmrc.gov.uk/manuals/bimmanual/BIM47701.htm

hariboh

He has always claimed mileage in the previous years not the repairs, mot etc.

He has a car because in previous years when we have purchased a private family car we just transfer the older car to him and he uses that. There has never been any buying? cost put through his business for about 7 years for a van.

He is a sole trader

...so because he claims mileage ..he cant put any of the buying costs through his business?

taxing

dori2o wrote: »

Completely irrelevant for a SOLE TRADER.

QUOTE]

A sole trader can use AMAPs rates instead of strict method of expenses/capital allowances provided his turnover is below the VAT registration level. Once he chooses this method he has to stay with it until he changes the vehicle when he can make the decision to change to strict method with the new vehicle.

If he bought a van, then full Annual Investment Allowance would be due so full 100% tax write off in year of purchase.

Similarly, if he buys a low emmissions car that gets favoured tax treatment (less than 110g/km of Co2 or an electrically propelled car) then 100% tax write off in year of purchase.

Both would need to be restricted for any private use element involved.

Regards.

Pennywise

dori2o wrote: »

Completely irrelevant for a SOLE TRADER.

See here (page 10 onwards)

http://www.hmrc.gov.uk/worksheets/sa103f-notes.pdf

Just to echo the comments of others. It's a little worrying that an HMRC employee doesn't know this, but a sole trader or partner can indeed choose to claim the 40/45p per mile instead of claiming actual costs, but only if their total turnover (as defined for VAT purposes) is below the VAt registration threshold. A very little known fact is that in addition to the 40/45p per mile, you can also claim your costs of financing the vehicle, i.e. loan interest - the 40/45p per mile only covers the cost of the vehicle and running costs - not the financing charges - HMRC helplines won't tell you that either!!

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

John_Pierpoint

taxing wrote: »

dori2o wrote: »

Completely irrelevant for a SOLE TRADER.

QUOTE]


Similarly, if he buys a low emmissions car that gets favoured tax treatment (less than 110g/km of Co2 or an electrically propelled car) then 100% tax write off in year of purchase.

Regards.

Would a Skoda do?

VW must have introduced their most efficient diesel engines into the range recently.

http://www.nextgreencar.com/search_database/index.php?filters