fuel expenses, self employed

naddykins

hi. i've just started as a self employed chiropodist. visiting people in their own homes. only doing it part time at the moment so not earning millions as yet lol!
Ok, my question is this. Do I need to keep petrol receipts or do I record my mileage or both? Not really sure how to put it in my books yet. If I go out and earn £40, and travel 30 miles, my petrol expense would be £12 if recording mileage. sounds a lot for a 40 quid day. what do u think?

dejongj

40p for the first 10k and 25p there after....And yes keep a detailed record and keep the fuel receipts as well (probably won't need them, but if questioned it does provide proof you really did do the mileage)....

Remember that £12 is not just for petrol, it is to cover running your whole car (depreciation, maintenance, petrol, insurance etc....). So don't make the mistake like me, my car actually costs me around 78p per mile, but can only claim 40p...So I am subsidicing my work privately....

larmy16

I am a self employed cleaner who does regular trips throughout the week. I put down 40p per mile and don't do more than 10,000 in fact nowhere near it.

What I did was use the AA routplanner to work out exactly how many miles it was to each address I go to. You could still do the same using the postcode of where you are travelling from and to. HTH

I keep all my petrol receipts too.

ernie-money

Hi, Hope someone will read this even if it's a while since the original post...
My OH is self employed, but he hasn't got a car of his own. I own the only household car as I need it for the school run etc & he borrows it when he needs to transport materials etc to a new job, or if there's no public transport to where he is working, otherwise he just catches the bus!
I know tgis is not a typical set up for a self employed person, but that's how it is... We have therefore been keeping petrol receipts for whenever he's used my car and otherwise the bus tickets. Does this mean that we should really work out the mileage, even if he doesn't own a car? And still charge 40p per mile, regardless of if he travelled by bus or car? Or is he not allowed to claim for using my car? Should we in that case transfer the ownership to him? (It's not worth over 3 grand, so I don't think there would be any tax implications for this...!)
To be honest it would be difficult to work out his mileage exactly this far afterwards - it would be more of a guess (probably not that far out, as we should be able to work out where he's been working most weeks roughly), but is this the route we have to go down?
Thanks for your help anybody!

Bean_Counter

ernie-money wrote: »

Hi, Hope someone will read this even if it's a while since the original post...
My OH is self employed, but he hasn't got a car of his own. I own the only household car as I need it for the school run etc & he borrows it when he needs to transport materials etc to a new job, or if there's no public transport to where he is working, otherwise he just catches the bus!
I know tgis is not a typical set up for a self employed person, but that's how it is... We have therefore been keeping petrol receipts for whenever he's used my car and otherwise the bus tickets. Does this mean that we should really work out the mileage, even if he doesn't own a car? And still charge 40p per mile, regardless of if he travelled by bus or car? Or is he not allowed to claim for using my car? Should we in that case transfer the ownership to him? (It's not worth over 3 grand, so I don't think there would be any tax implications for this...!)
To be honest it would be difficult to work out his mileage exactly this far afterwards - it would be more of a guess (probably not that far out, as we should be able to work out where he's been working most weeks roughly), but is this the route we have to go down?
Thanks for your help anybody!

Hi,

Interesting question. I have a look into it and can find anything that specifically covers it. The 40p per mile etc is designed to cover fuel servicing tyres, RFL, insurance, depreciation, loan interest etc (per para 16.3 of HMRC booklet 480) and you can't claim anything else for that type of expenditure. However, the opposite would also be true. I would say go ahead and claim although I can't be 100% sure.

In terms of record keeping, create and maintain a log of the business trips done with date, destination, reason for trip and mileage. Try using multimap or similar to work out the mileages.

ernie-money

Thanks a lot for that - this is the first year he's even claimed any sort of expenses and it's all new to me too. We also have another problem I was wondering if anyone could help us out with. It is not about travelling expenses, so I should probably post it somewhere else, but maybe you would know the answer? Up until now my OH has always worked on his own, but he has now got a big job coming up and will have someone else working for him. The question is, how does he go about paying him? It is not someone who will regularly be on the payroll, but just for this one off. Does this person then have to be self employed, or can they somehow declare to the Inland Revenue that they have earned this money, without him taxing them, or should he pay their wages less tax? Finally, when my OH does his tax declaration next year, how does he explain this one?
Thanks a lot!

Bean_Counter

ernie-money wrote: »

Thanks a lot for that - this is the first year he's even claimed any sort of expenses and it's all new to me too. We also have another problem I was wondering if anyone could help us out with. It is not about travelling expenses, so I should probably post it somewhere else, but maybe you would know the answer? Up until now my OH has always worked on his own, but he has now got a big job coming up and will have someone else working for him. The question is, how does he go about paying him? It is not someone who will regularly be on the payroll, but just for this one off. Does this person then have to be self employed, or can they somehow declare to the Inland Revenue that they have earned this money, without him taxing them, or should he pay their wages less tax? Finally, when my OH does his tax declaration next year, how does he explain this one?
Thanks a lot!

Have a look at HMRC booklet IR56, which gives a few examples. The link is:

http://www.hmrc.gov.uk/pdfs/ir56.pdf

Hopefully this should enable you decide based on your own circumstances. Be careful to make sure that you get the decision correct, as the penalty for getting it wrong if HMRC catch up with you is prohibitive in terms on back tax, penalties etc. Whilst it is more tax efficient to be self-employed, HMRC are keen for people to be treated as employed so they get more tax.

Should you decide that the person is employed, which they likely will be, then the following link takes you to the HMRC booklet on starting up as employer:

http://www.hmrc.gov.uk/employers/employing-someone.pdf

It also have phone numbers that you can call if you are still not sure, or feel free to drop me a line back.

ernie-money

That's excellent - thanks again! I have now spoken to the Inland Revenue, and apparently the bus tickets should be taken straight off as deductions and not go under travel expenses, and any miles to be calculated on top. I hope this is right and may I add that I'm not looking forward to filling the forms in! Many thanks anyway...

Bean_Counter

ernie-money wrote: »

I hope this is right and may I add that I'm not looking forward to filling the forms in!

That sounds fine. You know where we are if you need assistance with the forms.

Raksha

Don't forget HMRC don't say it costs 40p per mile to run a car, they say you can have 40p per mile TAX FREE to run your car, which I think is the equivilant of 26p after tax IIRC.