Self employed - Charged mileage to client

CraggyRockFace

Hello,

Second question today on my self assessment tax return.

My self employed accounts are very simple.

I only earned one lump sum in the 13-14 tax year - for £1400, which was for 7 days work for a client. I had to drive to the location of the job, which was a total of 76 miles overall. I charged this cost to the client at 45p per mile, which was 0.45 x 76 = £32.20

So the client paid me a total of £1400 + £32.20 = £1432.30

So in my self assessment do I put my turnover as £1400 or £1432.20?

And in my expenses do I just put the £32.20 cost of the mileage which was my only expense?

So this logically leaves me with a net profit of £1400?

The only reason I wasn't sure about putting the mileage cost into the turnover section, was because it doesn't sound like "takings, fees, sales or money earned by your business".

I know this is such a simple question, but I don't know what the rules are. Most of the examples seem to assume you will pay your petrol expenses as part of your business, and not be claiming them back from a client, which is what I'm doing.

Thanks,

Pennywise

Your turnover is £1432 and your expenses are £32, leaving £1400 net profit.

zygurat789

CraggyRockFace wrote: »

Hello,

Second question today on my self assessment tax return.

My self employed accounts are very simple.

I only earned one lump sum in the 13-14 tax year - for £1400, which was for 7 days work for a client. I had to drive to the location of the job, which was a total of 76 miles overall. I charged this cost to the client at 45p per mile, which was 0.45 x 76 = £32.20

So the client paid me a total of £1400 + £32.20 = £1432.30

So in my self assessment do I put my turnover as £1400 or £1432.20?

And in my expenses do I just put the £32.20 cost of the mileage which was my only expense?

So this logically leaves me with a net profit of £1400?

The only reason I wasn't sure about putting the mileage cost into the turnover section, was because it doesn't sound like "takings, fees, sales or money earned by your business".

I know this is such a simple question, but I don't know what the rules are. Most of the examples seem to assume you will pay your petrol expenses as part of your business, and not be claiming them back from a client, which is what I'm doing.

Thanks,

The £32.20 was money which you took from your client by way of a fee and therefore forms part of your sales and is indeed money earned by your business.
If you don't report ALL the incomings of your business HMRC will think you are trying to hide something and they will start to INVESTIGATE and you DO NOT want that.

CraggyRockFace

zygurat789 wrote: »

The £32.20 was money which you took from your client by way of a fee and therefore forms part of your sales and is indeed money earned by your business.
If you don't report ALL the incomings of your business HMRC will think you are trying to hide something and they will start to INVESTIGATE and you DO NOT want that.

Thank you, that is perfectly clear. I understand now.

Cheers.

Game_Over

CraggyRockFace wrote: »

Hello,

Second question today on my self assessment tax return.

My self employed accounts are very simple.

I only earned one lump sum in the 13-14 tax year - for £1400, which was for 7 days work for a client. I had to drive to the location of the job, which was a total of 76 miles overall. I charged this cost to the client at 45p per mile, which was 0.45 x 76 = £32.20

So the client paid me a total of £1400 + £32.20 = £1432.30

So in my self assessment do I put my turnover as £1400 or £1432.20?

And in my expenses do I just put the £32.20 cost of the mileage which was my only expense?

So this logically leaves me with a net profit of £1400?

The only reason I wasn't sure about putting the mileage cost into the turnover section, was because it doesn't sound like "takings, fees, sales or money earned by your business".

I know this is such a simple question, but I don't know what the rules are. Most of the examples seem to assume you will pay your petrol expenses as part of your business, and not be claiming them back from a client, which is what I'm doing.

Thanks,

You may want to check with HMRC if such travel cost is tax deductable.

Ordinary commuting is not tax deductable.

As I understand it, you only worked 7 days last year in regards to this business venture, and all work was carried out at the same location.

antrobus

Game_Over wrote: »

You may want to check with HMRC if such travel cost is tax deductable.

Ordinary commuting is not tax deductable.

As I understand it, you only worked 7 days last year in regards to this business venture, and all work was carried out at the same location.

I'm not that convinced that HMRC would really care one way or another as far as £32.20 is concerned.

Game_Over

antrobus wrote: »

I'm not that convinced that HMRC would really care one way or another as far as £32.20 is concerned.

Always worth checking direct with HMRC though

Unless you can point to a valid source that identifies exactly how much HMRC will gladly allow you to earn and evade tax on

zygurat789

Game_Over wrote: »

You may want to check with HMRC if such travel cost is tax deductable.

Ordinary commuting is not tax deductable.

As I understand it, you only worked 7 days last year in regards to this business venture, and all work was carried out at the same location.

#
Have you ever known HMRC answer a question like that clearly, concisely and definitively?

LittleVoice

Game_Over wrote: »

You may want to check with HMRC if such travel cost is tax deductable.

Ordinary commuting is not tax deductable.

As I understand it, you only worked 7 days last year in regards to this business venture, and all work was carried out at the same location.

Surely the OP did not undertake "ordinary commuting".

They had the expense of visiting a client location. The OP was not an employee or visiting the same location for a couple of years.

purdyoaten

LittleVoice wrote: »

Surely the OP did not undertake "ordinary commuting".

They had the expense of visiting a client location. The OP was not an employee or visiting the same location for a couple of years.

Completely agree.

Game_Over

LittleVoice wrote: »

Surely the OP did not undertake "ordinary commuting".

They had the expense of visiting a client location. The OP was not an employee or visiting the same location for a couple of years.

I'm a little confused as to why you are so sure this was not ordinary commuting?

Almost everyone who works incurs an expense of going to work.

As I understand it, the OP only worked for 7 days last year in that particular business of theirs, and every day such work was at the same location ... so why would they have gone there for the past 2 years??? :huh:

Anyway, I'm sure if the OP were to follow my advice in post#5, everything will be clarified