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Claiming approved mileage allowance in 2 connected companies

Mr Jones is a director of company A and claims mileage at the approved HMRC rates. He is likely to reach 10,000 miles before 6 April this year so will need to claim at the lower rate after that.

He is also a director of a much smaller company B, that has no employees, but is billed by company A for work done by company B's employees.

He has just started submitting mileage claims direct to company B. Am I right in thinking that the 10,000 miles should be counted over both companies, as otherwise he would be making an taxable gain if the clock started at zero for the mileage claims in company B?

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07th Feb 2011 08:59

iow: is the 10k rate per person or per employment?

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08th Feb 2011 11:10

Associated employments

There is one £10k limit per employment, but the limit is shared in the case of "associated employments".

On employment is associated with another if:

the employer is the same;the employers are partnerships or bodies and an individual or another partnership or body has contro; over both of them; orthe employers are associated companies within the meaning given by S 449 CTA 2010.

You don't give enough info, but I suspect that you have associated employments.

Ss. 230(3)-230(4) ITEPA 2003.

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08th Feb 2011 11:29

Associated employment

Thanks Cirius for a truly excellent reply.

I think it is likely that this is an associated employment, and I will therefore insist that all expenses go through the larger company, to be billed out to the smaller one, if necessary.

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