First SA and mileage/expenses query/confusion.

ymakesmile

Hoping someone can shed some light for us if possible please :-)

My partner is now self employed and freelances for a company that he used to be at as an employee. His job involves a large amount of driving which he is allowed to invoice his old company for, although this is capped to a daily amount of £40. Most days he exceeds this as he does have to do a lot of miles but of course he can only invoice for the £40 max a day. For his tax return we have used the mileage allowance figures of 45p and 25p to work everything out. However we expected there to be a separate part of the self assessment to put all this information into, but it seems we have to include these expense payments received as part of his turnover, is that correct? Of course having to put these payments as part of his turnover has made his tax bill a whole lot more than we was expecting, and has messed things up for us quite drastically as we thought expenses were not liable for tax but it looks like we have got that very wrong?

zygurat789

As you said he has to invoice up to £40 per day, invoices are turnover, sales, income.
The 45p for the first 10,000 miles in a year and 25p thereafter are the amounts you may charge as expenses and deducted from the expenses before arriving at taxable profits. It is calculated on the actual mileage travelled.
Did you think that you could not declare the income AND claim the expense?

ymakesmile

zygurat789 wrote: »

As you said he has to invoice up to £40 per day, invoices are turnover, sales, income.
The 45p for the first 10,000 miles in a year and 25p thereafter are the amounts you may charge as expenses and deducted from the expenses before arriving at taxable profits. It is calculated on the actual mileage travelled.
Did you think that you could not declare the income AND claim the expense?

I think naively we didnt realise that the expenses were an income as such as they were being paid as expenses to cover all the driving he has to do to go to his appointments. Thank you for your help.