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Approved Mileage Allowance Payments

I am computing accounts for a 20 year period for a client. Client was self employed earning £5k commission per annum, HMRC have discovered the earnings and enquiry is in progress. Income and expenditure accounts for the period have been requested.

In relation to motoring costs (fuel, tax, insurance, repairs/servicing and capital allowances), is it correct that by agreeing a claim for AMAP rates with the Inspector at 45p / 40p per mile based on agreed level of business mileage that this expense will effectively include all motoring costs AND capital allowances for the vehicle?

Would it be more tax effective (but not more time effective obviously!) to compute fuel prices for each year and calculate based on fuel costs based on engine/fuel type, and then also claim tax deduction for motor tax, insurance, repairs and capital allowances?

My main issue with not using AMAP rates is that the client really won't know the vehicle in use for the last 20 years!  So AMAP would be easier to compute.

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06th Dec 2012 09:22

Go with mileage

The mileage rate includes EVERYTHING.

I usually go with the mileage rate because in the long term it is usually better and you can't change method unless you change the vehicle.

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06th Dec 2012 11:35

loan interest

The mileage rate doesn't cover hire purchase/loan interest: -

http://www.hmrc.gov.uk/manuals/bimmanual/BIM47701.htm

This may, of course, be difficult to ascertain if he doesn't know what car he had. Having said that, the mileage rate may also be a problem because there used to be different rates for different engine sizes (not just the 40p/25p per mile)

 

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Previous AMAP rates

Anyone got a link to the rates before 6 April 2002?

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There were no previous AMAP rates

sparkey999 wrote:

Anyone got a link to the rates before 6 April 2002?

AMAPs were introduced by FA2001 with effect from 6 April 2002.  Prior to that employees had to claim actual expenses and capital allowances too.  You're not going to be able to use AMAP rates going back 20 years.

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By foxtrot
06th Dec 2012 16:58

 

 

HMRC's 480 Expenses and Benefits current pamphlet clearly says that the AMAP includes

loan interest

From memory there was a time when the AMAP didn't include interest. Can't recall that date this changed but it was before  2009 2010

Given the background, I'd opt for AMAP !

 

 

 

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By DMGbus
06th Dec 2012 18:08

480 only applies to employees

foxtrot wrote:

 

HMRC's 480 Expenses and Benefits current pamphlet clearly says that the AMAP includes

loan interest

From memory there was a time when the AMAP didn't include interest. Can't recall that date this changed but it was before  2009 2010

Given the background, I'd opt for AMAP !

 

 

 

 

Different rules apply for self employed as in allowability of loan / HP interest in addition to the mileage rate.

My notes from the year 2008 tell me that what I say is confirmed at:

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http://www.hmrc.gov.uk/manuals/bimmanual/BIM47701.htm

" The taxpayer can claim the business proportion of the interest on a loan used to purchase the vehicle or the finance element of a hire purchase or finance lease. "

 

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12th Dec 2012 12:55

AMAP

 AMAPs replaced the Fixed Profit Car Scheme, which we operated for employees' business mileage before April 2002.

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Whillans Tax Tables used to contain a table

of AA or RAC rates which calculated the running costs of cars per mile per annum.

If you can find the old set in the office, or someones office, the 2002 wil contain 1992-2002 if I remember rightly.

There was always at least one person in an office who kept the historical stuff like this with pride and HMRC will happily accept claims based on those figures which included depreciation, petrol, road tax, insurance  etc etc

If he always drove cars of cc a particular cc as opposed to make there will be a rate for that band

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12th Dec 2012 14:40

previous rates

The rates for 1995/96 and 1996/97 are here: -

http://archive.treasury.gov.uk/pub/text/budget95/rev32.txt

 

The rates from 1997/1998 to 2001/02 are here: -

http://www.accsinfo.co.uk/RAMR.htm

 

 

The rates for earlier years were: -

Tax     Mileage         up to   1001-   1501-   over 
year                    1000cc  1500cc  2000cc  2000cc

1995/6  up to 4000      27p     34p     43p     60p
            over 4000       15p     19p     23p     32p

1994/5  up to 4000      27p     33p     41p     56p
            over 4000       15p     19p     23p     31p

1993/4  up to 4000      26p     32p     40p     54p
            over 4000       15p     18p     22p     30p

1992/3  up to 4000      25p     30p     38p     51p
            over 4000       14p     17p     21p     27p

The best of luck to you!

 

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Magic memories we have

I have a feeling the AA rates were more generous than the FCPS rates but can't guarnatee that

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