Predicament - what should I do?

[ASB]

Well I called my accountant and just put it to him, said I had discussed it with some other contractors and that they had been told they were only allowed to claim 40p/mile.

I also contacted HMRC who confirmed this.

My accountant is going to look into this and get back to me tomorrow.

All "expenses" count as income. Some are reclaimable. Check the notes on your tax return at the end of year. I think you may well find there are now two boxes.

One in which you put the excess of mileage received over the allowable 40/25 (which you should fill in).

One in which you put the deficit (e.g. I only get 11p a mile for nominal fuel costs because I have a company car [actually I trade it for cash but thats a different thing]). In this case I get relief on the difference.

The net result is everybody who fills in a tax return gets relief at 40p/25p irrespective of what they are paid.

You have done nothing wrong provided you fill in the reutrn correctly.

[Archangel]

I've spent 10 months claiming this 40p + 9p per mile, approx 200 miles per month. How can I go back and correct this as I've been paying my mileage expenses monthly out my company account. I have the log in excel so I can just delete the 9p column and it will give me the correct total, but how would I fix this in my books? I don't want to ask my accountant this as I've already discussed this with him and he is adamant that it is fine to claim this 9p extra. In all honesty it's a bit worrying that this mistake can actually take place by someone in the profession, but everything else so far he's been spot on with.

I presume you haven't had a yearend yet? If not then go back and change all the 9p payments to "directors loan account credit", then pay the company back the £180.00 and enter it in the books as "directors loan account debit". Sorted.

HTH

[chris79]

Wow, cheers guys for the 2 above posts.. both make sense. What I'll do is if my accountant agrees it's a f**k up then I'll do the directors loan method and repay it. If he insists its 40p+9p, then I'll take his word for it and just pay the tax on the 9p through my own self assessment... result either way!

I didn't want to question his professional judgement really as it's a bit embarrassing to have to point out how he should do his job! All the same he's spot on with everything else and is doing my year end for me etc for a very good price (to be fair I've put a bit of business from other people his way) etc.. so looks like it's all well that ends well!

Thanks again!

[Sockpuppet]

Surely the 9p per mile is VAT and is deducted from your VAT return. You don't pay that to yourself directly.

No. Wrong.

No VAT on the 40p as your employees are not vat registered. You can claim the VAT back on the fuel element but its closer to 2p a mile.

[Archangel]

(to be fair I've put a bit of business from other people his way) etc.. so looks like it's all well that ends well!

They won't be happy to find out he's incompetant!

[Ardesco]

I didn't want to question his professional judgement really as it's a bit embarrassing to have to point out how he should do his job! All the same he's spot on with everything else and is doing my year end for me etc for a very good price (to be fair I've put a bit of business from other people his way) etc.. so looks like it's all well that ends well!

He should be happy that you are questioning his professional judgement, I question my accountants all the time when I want something explained to me. At the end of the day you are the person who is going to get in trouble if your accounts are wrong, not your accountant.

If you are not sure of something you should always challenge it and satisfy yourself that it is being done correctly, remember it is your ass on the line not his. I'm not suggesting that your accountant would purposefully do something wrong, but if he does it is not as big a problem for him as it is for you.

I would also keep an eye on everything else as well and ask him to explain anything you do not understand or do not feel comfortable with, if he has got this wrong it is possible he has slipped up somewhere else as well.


I know you don't want to make a scene and cause any ill feeling especially as you accountant appears to be good friends with other member of your family, but at the end of the day you are looking after your business. Don't let personal relationships get in the way of business, and never accept sub standard service. It is things like this that could potentially end your business.

[r0bly0ns]

He should be happy that you are questioning his professional judgement, I question my accountants all the time when I want something explained to me. At the end of the day you are the person who is going to get in trouble if your accounts are wrong, not your accountant.

If you are not sure of something you should always challenge it and satisfy yourself that it is being done correctly, remember it is your ass on the line not his. I'm not suggesting that your accountant would purposefully do something wrong, but if he does it is not as big a problem for him as it is for you.

I would also keep an eye on everything else as well and ask him to explain anything you do not understand or do not feel comfortable with, if he has got this wrong it is possible he has slipped up somewhere else as well.


I know you don't want to make a scene and cause any ill feeling especially as you accountant appears to be good friends with other member of your family, but at the end of the day you are looking after your business. Don't let personal relationships get in the way of business, and never accept sub standard service. It is things like this that could potentially end your business.

This is exactly what I have done from day one and still do.

On the very rare occasion that my accountant has made a mistake (once I think), he has been very apologetic and rectified it immeditaely.
On the 100's of times it is just me not understanding what he is doing, he has taken the time to explain things to me.

Acountants are people too .