Paid Mileage for Self-Assessment tax return

ender4

Hi, 

My wife is self-employed and does her self assessment tax return each year. 
She gets paid by various clients on a day-rate or an hourly rate for which she raises invoices to them.

When she fills in her self-assessment, she claims the mileage expense as allowable mileage at the 0.45p rate (under 10.000 miles). So no issues usually. 



However, this year she's worked for a large client that has paid her 0.45p mileage rate. 

I'm unsure how to show this in the self-assessment. Do we count it as normal income, and then adjust something in the mileage expenses part? Or not count it in the income and show it as disallowable mileage in expenses?

To make it slightly more complicated, most clients still don't pay mileage (8,000 miles). But this client (4,000 miles) has tipped the total annual mileage over 10,000 miles.

Could do with some simple explanation please of where to show it and also how to deal with part of it being over the 10,000 miles threshold.

Thanks.

[Deleted User]

I would add the amount for mileage received to turnover. 

Mileage over 10000 miles is claimed at 25p. So - total mileage of 12000, as in your wife’s case,  would result in a claim on the return of 5000 (10000 @ 45p and 2000 @25p)

QrizB

I'm employed but still complete Self Assessment. My employer pays me the 45p/mile for mileage. I don't enter anything mileage-related on my SA return.

I would suggest that you ignore the reimbursed miles, make no mention of them. It's an expense that's been reimbursed by the client, the client will be claiming it as their business expense.

Edit: re the 10k miles issue, claim the remaining 8k miles as 6k at 45p, 2k at 25p.

[Deleted User]

QrizB said:

I'm employed but still complete Self Assessment. My employer pays me the 45p/mile for mileage. I don't enter anything mileage-related on my SA return.

I would suggest that you ignore the reimbursed miles, make no mention of them. It's an expense that's been reimbursed by the client, the client will be claiming it as their business expense.

Edit: re the 10k miles issue, claim the remaining 8k miles as 6k at 45p, 2k at 25p.

No - the op’s wife is not employed but self-employed. It cannot be  ignored. 

As an employee you do not declare payments received for mileage unless there is a profit element where they exceed the tax free limits. 

You are in an entirely different situation.

His wife’s client is likely to have issued an invoice to include the amount paid by way of mileage.

QrizB

purdyoaten2 said:

His wife’s client is likely to have issued an invoice to include the amount paid by way of mileage.

That should be fairly easy to clear up, then.

OP do you have such an invoice?

BoGoF

QrizB said:

purdyoaten2 said:

His wife’s client is likely to have issued an invoice to include the amount paid by way of mileage.

That should be fairly easy to clear up, then.

OP do you have such an invoice?

Regardless if it was invoiced or not it is still income from self-employment.

Your advice is wrong.

[Deleted User]

QrizB said:

purdyoaten2 said:

His wife’s client is likely to have issued an invoice to include the amount paid by way of mileage.

That should be fairly easy to clear up, then.

OP do you have such an invoice?

The point is that you are an employee and do not need to declare mileage under the tax free limits. 

The op’s wife is not an employee. The mileage is a reimbursed expense and should be included in turnover. 

https://community.hmrc.gov.uk/customerforums/sa/4445fc97-dc0f-ed11-b5cf-00155d973ade

QrizB

BoGoF said:

QrizB said:

purdyoaten2 said:

His wife’s client is likely to have issued an invoice to include the amount paid by way of mileage.

That should be fairly easy to clear up, then.

OP do you have such an invoice?

Regardless if it was invoiced or not it is still income from self-employment.
Your advice is wrong.

Giving wrong advice on the internet is commonplace. I could've deleted it but thought it could stand as a bad example.

purdyoaten2 said:

QrizB said:

purdyoaten2 said:

His wife’s client is likely to have issued an invoice to include the amount paid by way of mileage.

That should be fairly easy to clear up, then.

OP do you have such an invoice?

The point is that you are an employee and do not need to declare mileage under the tax free limits. 

The op’s wife is not an employee. The mileage is a reimbursed expense and should be included in turnover. 

https://community.hmrc.gov.uk/customerforums/sa/4445fc97-dc0f-ed11-b5cf-00155d973ade

I'm not arguing with any of that.

What should the OP do if they *don't* have an invoice?

ender4

Yes, she is self-employed and we issue an invoice to every client for work done. For this particular client, we issued various invoices during the year showing 3 lines on each invoice:

1) the amount of the day rate = £x

2) the amount of mileage x 0.45p = £x

3) Total of the above 2 lines as the total £ of the invoice. 

ender4

[Deleted User] said:

I would add the amount for mileage received to turnover. 

Mileage over 10000 miles is claimed at 25p. So - total mileage of 12000, as in your wife’s case,  would result in a claim on the return of 5000 (10000 @ 45p and 2000 @25p)

Thanks, this is what I will do.

Grumpy_chap

QrizB said:

What should the OP do if they *don't* have an invoice?

It is very rare when operating a business for there not to be an invoice.  Either the invoice has to be generated by the business so that the customer will pay or, less common, the customer may operate self-billing.  In cases where there is no invoice, a "record invoice" can be raised for the purposes of the OP's business.

That is moot as the OP has confirmed they raise an invoice.

The invoice is one transaction, including the charged mileage, and that goes in the sales ledger.
The expenses are a second transaction and the rate of mileage that the OP can claim from the business is unrelated to the rate that the mileage has been paid by the customer.