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Self employed courier

I have just started to act for a self employed courier. He is VAT registered but his turnover is below the statutorty registration limit. He rents a van on a week by week basis and claims this, and all other motor running costs, in his accounting records.

My question is whether he could claim mileage allowance against his profits rather than the actual expenses.

I am wondering whether  a) being VAT registered  or  b) it is van not a car   excludes him from claiming mileage ?

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It depends on the amounts
The claiming of mileage allowance, as far as I am aware, is not restricted to cars.

The question here should be, what is the most tax efficient method of claiming relief for motor expenses. You should calculate what the total running costs are and deduct and private use percentage and then compare this figure to the business mileage under the 40/25p per mile route.

Vat can be claimed on all motor expenses if he goes down the actual expenses route but there will be a scale charge if he has private use of fuel. On a mileage basis you can claim back vat based upon the fuel element, which is effectively the amount you would pay for a company car driver who pays for their own fuel.

You could combine the two and have the vehicle and running costs excluding fuel through the business and pay for fuel personally an claim the company car mileage rates on business miles but, again, you would need to work out what is best for the client.

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