expensing milage to business

bob charles

Bought a new to me vehicle during the last week. Im wanting to know am I better off to get the business to buy the vehicle and put the fuel in etc or am I better off to buy the vehicle privately and expense it back to the business for the amount of miles which it does each year as I an employee of the business;). I understand if I buy it privately then I have to buy fuel aswell privately. Im think that the tax saving would be greater if I was to expense the vehicle back to the business but would make keeping receipts and accounting more tricky

Viewtodiefor

bob charles wrote: »

Bought a new to me vehicle during the last week. Im wanting to know am I better off to get the business to buy the vehicle and put the fuel in etc or am I better off to buy the vehicle privately and expense it back to the business for the amount of miles which it does each year as I an employee of the business;). I understand if I buy it privately then I have to buy fuel aswell privately. Im think that the tax saving would be greater if I was to expense the vehicle back to the business but would make keeping receipts and accounting more tricky

Not sure on the best accountancy issues but for fuel expenses if u don't have a tank then a statoil fuel card may help n statoil r prettymuch everywhere.

freedominacup

bob charles wrote: »

Bought a new to me vehicle during the last week. Im wanting to know am I better off to get the business to buy the vehicle and put the fuel in etc or am I better off to buy the vehicle privately and expense it back to the business for the amount of miles which it does each year as I an employee of the business;). I understand if I buy it privately then I have to buy fuel aswell privately. Im think that the tax saving would be greater if I was to expense the vehicle back to the business but would make keeping receipts and accounting more tricky

I'll ask the boss when she gets home. Is the business a limited co. is one of the questions she'll ask. She knows this stuff fairly well from the day job.

lakill Farm

First question is where was the funds got for buying the new vehicle? was vat claimed back etc?

2nd off i think you do alot of mileage? over 4000km the mileage rate is about enough to cover diesel (thats not pulling a trailer with 4 cattle in it)

3rd depends if your vat registered or not

Farmer Pudsey

It is not the headache it is made out to be. I did not know that revenue allowed you to claim milage expense as a sole trade, I taught you had to account you learn somthing new every day.

Every time you fill with fuel put the reciept in an envelope, use a buisness credit card, issue with a statoil card is that you have to take the statoil price can often be 1-2 cent/litre above other stations. I be inclined to to use the expense route as you are probally on the road a lot, I presume that it is a commercial vehicule. Remember you can also partially write off your car as well as now and again like any sole trader you use that for buisness purposes as well

bob charles

vehicle would be bought with personal money if going the expense route. No Vat on vehicle and farm not vat registered either, accountant says if the business buys the vehicle that I as an employee will be charged a 7% BIF benefit in kind of the purchase amount. is this the case as a sole trader is only allowed one business vehicle?? sounds strange to me. he says I would have to keep a log of every journey

LivInt20

bob charles wrote: »

vehicle would be bought with personal money if going the expense route. No Vat on vehicle and farm not vat registered either, accountant says if the business buys the vehicle that I as an employee will be charged a 7% BIF benefit in kind of the purchase amount. is this the case as a sole trader is only allowed one business vehicle?? sounds strange to me. he says I would have to keep a log of every journey

Buy privately.

Any milage done as an employee can be expensed to the business.

Will cost you in BIK otherwise

Farmer Pudsey

bob charles wrote: »

vehicle would be bought with personal money if going the expense route. No Vat on vehicle and farm not vat registered either, accountant says if the business buys the vehicle that I as an employee will be charged a 7% BIF benefit in kind of the purchase amount. is this the case as a sole trader is only allowed one business vehicle?? sounds strange to me. he says I would have to keep a log of every journey

Is it a buisness or sole trader. As a sole trader you can write off any commercial vehicule completely and a passanger vehicule at the rate of 66%. If you claim milage you have to use public service rates and keep a log. However when you go over 4k miles the rate drops having spoken to people driving fuel efficent vehicules it at this stage only covers cost of fuel and maintenance not depreiation of vehicule. BIK can catch as well however if doing very high milage the rate is quite low

Black Smoke

bob charles wrote: »

vehicle would be bought with personal money if going the expense route. No Vat on vehicle and farm not vat registered either, accountant says if the business buys the vehicle that I as an employee will be charged a 7% BIF benefit in kind of the purchase amount. is this the case as a sole trader is only allowed one business vehicle?? sounds strange to me. he says I would have to keep a log of every journey

I thought the BIK on a van or commercial jeep, was calculated at 5% of original market value.
In other words, you would liable for PAYE, USC etc, on a notional amount equivalent to 5% of the value of the jeep when NEW!!
No idea where your accountant is getting 7% from. Really important thing to remember, it's based on original price when new or OMV. Original Market Value.

bob charles

LivInt20 wrote: »

Buy privately.

Any milage done as an employee can be expensed to the business.

Will cost you in BIK otherwise

Is this not unfair if say you have your own car to get to work, but then use the employers vehicle whilst at work? in my case I would be walking to work and then using the business vehicle. Current sole traders

Red Sheds

If you are a sole trader then BIK does not apply, it only applies if you are an employee of a business and have use of a motor vehicle for private use.

If you are the owner of the business and operate it as a sole trader, then you have no option but to charge the vehicle and its running costs against the business. As a sole trader you are not allowed to pay mileage expenses to yourself. Different if you trade as a company, then you can own the vehicle and claim mileage expenses and aviod any BIK, but then the company does not get a capital allowance on the vehicle.

I used to be able to do an easy comparisson of claiming mileage versus business ownership, but am not familair tiwht the mileage rates, tax rates and all that now. Any accountant should be able to easily work it out.