Funeral partnership - claim motor expenses & mileage?

Claim motor expenses & mileage?

Didn't find your answer?

Hi Pearls of wisdom will be gratefully received. 2 funeral assistants (previously separate sole traders) have teamed up to start a new business. Whilst the new business takes off they continue to contract themselves out to other funeral related businesses for their services but want to channel all income through the newly found partnership. They have bought a limousine which they use solely for their partnership (which at the moment is hardly used) but then use personal cars for travelling all over the country whilst they sub-contract. Has anyone come across or is there anyway they take advantage of claiming running expenses (& in turn allowances on the new vehicle purchase for the limo (aware of the grey area on car or limo) but also be able to claim mileage on the high levels of mileage covered whilst contracting? Thanks in advance

Replies (15)

Please login or register to join the discussion.

Worm
By TheLambtonWorm
31st Aug 2016 15:13

Perhaps I'm missing something, but if they want to channel all their income through the partnership, all they need to do is invoice their customers via the partnership.

In terms of the mileage - then they can claim running costs & capital allowances in the partnership if they introduce their personal cars into it, and also mileage payments in their respective sole trader businesses.

The fly in the ointment though, will be that there'll be a massive private use percentage in the partnership for the personal use of the cars relating to the sole trade businesses.

Thanks (1)
avatar
By Sandi12
31st Aug 2016 16:17

Sorry thought I suggested all income to now be channelled through partnership.

They in affect no longer would want separate sole traders but for it all go through the partnership but wanted ideally to claim mileage for contracting in personal cars but motor expenses in limo for "new" partnership services?

Thanks (0)
Replying to Sandi12:
RLI
By lionofludesch
31st Aug 2016 16:23

Sandi12 wrote:

Sorry thought I suggested all income to now be channelled through partnership.

They in affect no longer would want separate sole traders but for it all go through the partnership but wanted ideally to claim mileage for contracting in personal cars but motor expenses in limo for "new" partnership services?

Clear as mud.

1. Invoice these "contracting" jobs on a partnership letterhead.

2. Claim all the limo expenses.

3. Claim a mileage rate from the partnership for each partner's business mileage.

There's no problem here. Very straightforward.

Thanks (2)
Worm
By TheLambtonWorm
31st Aug 2016 16:42

Agree with Lion.

The only problem I think is that the 45/25p mileage rates (I think), can only be used when the turnover is below the VAT threshold.

Thanks (0)
Replying to TheLambtonWorm:
By cheekychappy
31st Aug 2016 16:48

TheLambtonWorm wrote:

Agree with Lion.

The only problem I think is that the 45/25p mileage rates (I think), can only be used when the turnover is below the VAT threshold.

That hasn't been the case since 13/14.

Thanks (0)
Replying to cheekychappy:
RLI
By lionofludesch
31st Aug 2016 17:24

Agree - that turnover limit has gone.

Thanks (0)
avatar
By Sandi12
31st Aug 2016 17:06

Many thanks for your comments

Re "claim a mileage rate from the partnership for each partner's business mileage"......
.....I assume you mean put this through the partnership accounts & not to show separately in any way, shape or farm on their individual SAR's?

Many thanks

Thanks (0)
avatar
By Sandi12
31st Aug 2016 17:16

OK many thanks for the valid points.

Sounds good to me. Just to clarify the mileage would go through the partnership accounts & not be entered in some way, shape or form as a separate entity on the individual SARs?

Thanks (0)
Replying to Sandi12:
RLI
By lionofludesch
31st Aug 2016 17:22

You can't do it any other way. Claiming "personal" allowances/expenses on your own return against shares of partnership profits ended when self assessment arrived twenty years ago.

Thanks (0)
RLI
By lionofludesch
31st Aug 2016 17:34

Incidentally, I'd speak to them about maybe forming a company. Just in case one of them wants to leave.

Leaving a company is easy. Leaving a partnership is fraught with danger. There was a guy on here a few months ago - agreed with his partner that he had no further liability but still found HMRC correctly pursuing him personally for CIS tax deducted before he left the partnership. If he'd traded as a company, he'd've had no liability.

Thanks (0)
Worm
By TheLambtonWorm
31st Aug 2016 18:43

Changed in 13/14??

Bloody hell, I think i must have slept through that year.

Thanks (0)
Replying to TheLambtonWorm:
RLI
By lionofludesch
01st Sep 2016 08:37

It was when there was a big review of flat rate expenses.

Thanks (0)
Replying to TheLambtonWorm:
By JCresswellTax
01st Sep 2016 09:10

Yeah I missed that too (thankfully it hasn't come up for a while)!

Thanks for the update :)

Thanks (0)
Worm
By TheLambtonWorm
01st Sep 2016 08:49

My memory worries me sometimes.

Next thing you'll be telling me taper relief has been scrapped.

Thanks (1)
Replying to TheLambtonWorm:
RLI
By lionofludesch
01st Sep 2016 08:53

Not yet ......

Window Tax has gone, though.

Thanks (1)