What do accountants do with petrol receipts without also asking for a car log of business miles? When claiming mileage I use the obvious method of using the number of actual business miles travelled based on a car log or apportioning the business element of total car costs (petrol, MOT, isurance etc), also using a car log to base the apportionment on. So if an accountant asks a client for petrol receipts without also requesting a car log what do they do with this? Can they realistically deduct any mileage? Let's assume self employment and not VAT registered. And shouldn't the accountant return the petrol receipts to the client afterwards?
Thanks
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Why are you asking?
Are you asking because of a particular problem with an accountant? Context is always helpful when trying to answer questions.
Most accountants will ask their client for their percentage mix of business/private mileage if using the actual costs method, assuming they are a sole trader or partnership (private use add backs are irrelevant for limited companies). No reason for an accountant to insist on a mileage log as evidence of what the client tells him.
As for keeping receipts, most accountants would hand all receipts etc back to the client once the work is done. No reason for an accountant to keep them in most cases. Although many clients don't want their paperwork back and are happy for the accountant to keep it in their files in case of tax enquiry - they feel it safer in case they lose it themselves or it gets lost in the post when being returned.
If you have particular worries, best to share with us, so we can help further.
Can petrol receipts just be posted directly into the accounts, without doing mileage calculations?
The director (not on the payroll) uses his private car and petrol is paid by company credit card.
Is fuel in this case an allowable expense for corporation tax computation?
You want to look EIM31205 and also approved mileage payments
Can petrol receipts just be posted directly into the accounts, without doing mileage calculations?
The director (not on the payroll) uses his private car and petrol is paid by company credit card.
Is fuel in this case an allowable expense for corporation tax computation?
A different question from that of the OP, have a read of following plus other linked HMRC guidance.
http://www.hmrc.gov.uk/manuals/eimanual/EIM31205.htm
There is no reason not to get CT relief but there are personal tax implications for the director that need addressed, paying for say all fuel on a company credit card tends to be expensive re personal tax, there are better tax free ways using Approved Mileage Allowance Payments, see EIM31230
Personal tax?
A different question from that of the OP, have a read of following plus other linked HMRC guidance.
http://www.hmrc.gov.uk/manuals/eimanual/EIM31205.htm
There is no reason not to get CT relief but there are personal tax implications for the director that need addressed, paying for say all fuel on a company credit card tends to be expensive re personal tax, there are better tax free ways using Approved Mileage Allowance Payments, see EIM31230
Cheers, I'll look into that. Yes slightly different question but same issue, I have lots of petrol receipts however our accountant don't ask for those, I just post them normally into the accounts since they are paid with company card.
However I don't understand what this has to do with personal tax, as the petrol used was for business trip and not personally paid.
There certainly may be personal tax issues (and PIID issues )
A different question from that of the OP, have a read of following plus other linked HMRC guidance.
http://www.hmrc.gov.uk/manuals/eimanual/EIM31205.htm
There is no reason not to get CT relief but there are personal tax implications for the director that need addressed, paying for say all fuel on a company credit card tends to be expensive re personal tax, there are better tax free ways using Approved Mileage Allowance Payments, see EIM31230
Cheers, I'll look into that. Yes slightly different question but same issue, I have lots of petrol receipts however our accountant don't ask for those, I just post them normally into the accounts since they are paid with company card.
However I don't understand what this has to do with personal tax, as the petrol used was for business trip and not personally paid.
Every mile the car drives using that petrol is for business, really?
The car ,notwithstanding it is not that of the company, never goes home with the director? ( home to office and office to home normally is not business mileage)
It appears to me Director is merely filling HIS car at company expense so there will likely be, and near certainly if HMRC look into it and seek justification, some personal use. What records does he/ the company keep re the mileage/use/ consumption?
The paid mileage per mile for recorded business trips is far neater. I would read the guidance very carefully, it is the sort of issue where if picked up one year is likely to be reviewed re previous years, an HMRC enquiry could be expensive re both tax and time/professional help.
No records of mileage kept
It appears to me Director is merely filling HIS car at company expense so there will likely be, and near certainly if HMRC look into it and seek justification, some personal use. What records does he/ the company keep re the mileage/use/ consumption?
No records of mileage used etc.., as I said full petrol receipts are directly posted into the accounts as the car is mainly used for business. Unfortunately all the guidances I read around are for employees, the director is not on the payroll and therefore he doesn't do any P11D. I'm trying to find out more about this subject but the .Gov website but there is very little information.
Cheers so far for your replies
I'm a glutton for punishment
Whether the director is on the payroll or not is totally irrelevant to whether he completes a P11D.
If he receives benefits in kind from the Company, which based on your posts above he would appear to. Then it should be disclosed on a P11D
If the mileage is exclusively for business (i.e. he's not using the car at weekends and he doesnt use the car to travel to and from work) then it is a business expense and is deductible and does not represent a benefit to him.
If he is using the car and company paid fuel for business and personal use then it is a benefit and he should be completing a P11D and being taxed accordingly.
This section of the gov.uk website (top link googling 'company fuel benefit' is very clear and useful https://www.gov.uk/expenses-and-benefits-company-cars/overview
You also refer to the "obvious method of apportioning costs" - I'm not sure that is obvious. If this is a company vehicle then all the costs are for the company.
If this is a private vehicle then you should be using HMRC approved mileage rates to reimburse for wear and tear.
You dont seem to have figured out whether its a private car or a company car, I think that's the first hurdle for you to cross.
I hate to make this personal, but your threads seem to be trying to pin some blame on this accountant with very little genuine understanding of accounts. With all due respect, you don't appear to have the technical knowledge to be in a position to be critical of a professional.
LJMW
Sorry LJ - I wasnt clear. I was responding to Regina's subsequent question and thought she was the thread starter.
If the car is private
To answer your original question -
I think you should use HMRC mileage guides, I don't think you can apportion MOT and insurance based on the mileage (I may be wrong, but that's new to me). If it's a private car and he's doing business miles I think the safest bet is for him to pay the petrol personally and then reclaim from the Company at the set mileage rates.
Probably financially better off for it and also doesn't run the risk of getting collared by HMRC for a private mileage benefit.
Requesting copy receipts may just be to validate that the spend was on fuel (given no VAT implications). If going from credit card reports only he could be spending funds on anything at the garage. I had a nightmare sales director who was doing his personal food shop on the BP forecourt using the company card.
Sorry for any misunderstanding earlier. If you've seen Regina's other thread you'd see where the comments on attacking professionalism come in.
Not sure
in the absence of a mileage log, I think I'd ask the client to give me at least a decent understanding (in your case the pub guy) what his approximate pattern of travel was - i.e. once a month the the brewery etc. and at least be in a position to present a thought out case for business mileage should HMRC appear.
The hard thing in this case would be how many personal visits to other pubs he could claim as 'checking out the competition'
I think it would be an advisory point to the client to say "Look, we can present a reasonable case this year, but keep a log next time, you're protecting yourself" - speaking from experience having just shaken off the albatross that is a company fuel benefit bill!
This looks a nice link to decide whether you can use the mileage method (says you must keep a log) - http://www.kfaccounting.co.uk/claiming-business-motor-expenses/
You are right - the apportioning costs thing was picked up from your post, but I read it in the context of other replies from Regina. If I'd realised it wasnt one and the same your question was more than reasonably put and I would have given a more supportive answer.
It's a tight line sometimes on here between supporting the new faces in the industry and giving advice to people who should be getting advice from their accountant and paying for it, sometimes hard to tell. But, had I read your post in a silo I'd have definitely taken it as a fair question that deserved a helpful answer. No offence taken, I'd have jumped down my throat in your shoes
Glad your afternoon's on track! Have a good weekend.