motor costs

VAT registered sole trader

Didn't find your answer?

we have an individual with two businesses

he was previosuyl in a patrnership, but went it alone - and is VAT registered he's always used actual costs for motor costs under this business

he also has another business as a sole trader and he wants to use mileage rates for this one - this was fine when he was still in the partnership, but i'm not convinced now he's a sole trader and VAT registered for both

can anyone confirm?

Replies (4)

Please login or register to join the discussion.

chips_at_mattersey
By Les Howard
28th Jul 2017 10:46

If one client is the sole trader with two registrations, he needs to cancel one, and put all his activities into the other.
Actual motoring costs should be used, not mileage rates.

Thanks (0)
Replying to leshoward:
By mrme89
28th Jul 2017 11:16

leshoward wrote:

If one client is the sole trader with two registrations, he needs to cancel one, and put all his activities into the other.

If they are two separate trades, they should be reported separately.

leshoward wrote:

Actual motoring costs should be used, not mileage rates.

Why?

Thanks (0)
Replying to mrme89:
Portia profile image
By Portia Nina Levin
28th Jul 2017 15:59

mrme89 wrote:

If they are two separate trades, they should be reported separately.

That's just - you guessed it - botox!

mrme89 wrote:

Why?

Because mileage rates just do not apply to the self-employed for VAT purposes

For direct tax purposes, he can decide what to do on a per vehicle basis, but only has on 10K mile limit for both businesses.

Thanks (0)
chips_at_mattersey
By Les Howard
28th Jul 2017 14:42

And, here is the link to a thread about a sole trader using a ppm calculation for motoring costs: https://www.accountingweb.co.uk/any-answers/can-you-reclaim-vat-on-van-p...

Thanks (0)