Business accounts mileage

edited 30 November -1 at 1:00AM in Small Biz & Charities' MoneySaving
12 replies 1.2K views
digi_ddigi_d Forumite
14 Posts
edited 30 November -1 at 1:00AM in Small Biz & Charities' MoneySaving
I run a small business and do my own bookkeeping. I am aware I can claim 40p per mile. So, if I spend one day £40 on petrol I have to show it in my books as it has come out of my account.

If I cover 300 miles the same week then 300x.£120 If I put £120 in my books then this amount has not actually come out my bank only £40 of it. How can I show it without corrupting the bank balance
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Replies

  • SuarezSuarez Forumite
    970 Posts
    You cannot claim the 40p per mile (You can claim 45p now) and petrol costs - it's one or the other..
  • LomastLomast Forumite
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    The simplest way assuming you have a Business bank account set up is you pay the £40 for fuel out of your own pocket and then the company pays you the £120.

    How we do it is we keep a record of all milage done and then at the end of the month add it all up and then record the total milage for that month and transfer the appropriate amount from the business to our personal accounts.

    We used to pay the fuel on our company CC and then correct the amounts with a seperate payment but when we got an inspection from HMRC they were not happy with this.

    Hope that helps

  • whitepaperwhitepaper Forumite
    121 Posts
    digi_d wrote: »
    I run a small business and do my own bookkeeping. I am aware I can claim 40p per mile. So, if I spend one day £40 on petrol I have to show it in my books as it has come out of my account.

    If I cover 300 miles the same week then 300x.£120 If I put £120 in my books then this amount has not actually come out my bank only £40 of it. How can I show it without corrupting the bank balance

    You seem to be confusing personal expense with business expense.

    If you buy a tin of beans or a packet of chewing gum, how would you show that? You wouldn't because its a personal expense. Petrol is the same if you want to claim a mileage rate against your company.

    Btw, did you know HMRC actually allow you to claim up to 45p per mile (restricted to first 10,000 miles in any tax year for tax purposes, then it reduces to 25p). It's been that for quite a while now ;)
  • digi_ddigi_d Forumite
    14 Posts
    Suarez wrote: »
    You cannot claim the 40p per mile (You can claim 45p now) and petrol costs - it's one or the other..

    Cheers but if I do away with the original £40 that the fuel cost and put the 300 miles x .40 figure it will throw the bank balance out or do I show it in the cash column?? (I take note of others posters stating it is now 45 p per mile. I have not checked lately so unawhere of the change.)
  • digi_ddigi_d Forumite
    14 Posts
    whitepaper wrote: »
    You seem to be confusing personal expense with business expense.

    If you buy a tin of beans or a packet of chewing gum, how would you show that? You wouldn't because its a personal expense. Petrol is the same if you want to claim a mileage rate against your company.

    Btw, did you know HMRC actually allow you to claim up to 45p per mile (restricted to first 10,000 miles in any tax year for tax purposes, then it reduces to 25p). It's been that for quite a while now ;)

    I did not know that I thought if I paid for the fuel on my biz DC and then claimed the total mileage amount it would be the same but it obviously diffrreant. I had better pay for petrol on my personal card but then I am confused to the claimed amount being shown as coming out of my biz account on the spreadsheet (Bought form an accountant)
  • digi_ddigi_d Forumite
    14 Posts
    Lomast wrote: »
    The simplest way assuming you have a Business bank account set up is you pay the £40 for fuel out of your own pocket and then the company pays you the £120.

    How we do it is we keep a record of all milage done and then at the end of the month add it all up and then record the total milage for that month and transfer the appropriate amount from the business to our personal accounts.

    We used to pay the fuel on our company CC and then correct the amounts with a seperate payment but when we got an inspection from HMRC they were not happy with this.

    Hope that helps

    re-reading this makes sense now many thanks. I had better go back and redo the last three years then Phew!
  • Read the HMRC's rates, it's bedtime material, and a cure for insomnia. I use some software that allows subbies to log in and put their mileage in, for which I pay them, I claim my own mileage at 45ppm, to 10K, then 25ppm.
  • SlinkySlinky Forumite
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    The 45p rate came in on 6th April 2012 IIRC
  • edited 1 July 2013 at 6:00PM
    WywthWywth Forumite
    5.1K Posts
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    edited 1 July 2013 at 6:00PM
    Slinky wrote: »
    The 45p rate came in on 6th April 2012 IIRC
    I'm sure it started earlier than that.

    Edit: Thought so, it started a year earlier
    http://www.hmrc.gov.uk/budget2011/individuals-main-announcements.pdf
  • Prothet_of_DoomProthet_of_Doom Forumite
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    I have a simple 'expences' form, which details each trip, and the miles, and multiplies it by 45p and gives a weekly total.

    Which I then pay by bacs from business account into personal account.

    The form has a running total of miles, so when I get to 10,000 miles I multiply by 25p

    The money for the petrol, car (as in depreciation), tax, insurance repairs mot come from my personal account, and over 12,000 business miles and 5,000 personal miles, probably leaves me in "profit" by £1000 a year. But I've got 2 big bills coming up which will wipe it all out for this year. Exhaust manifold and DMF. Parts alone will be in excess of £800, plus 7 hours of labour.
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