Drawing Mileage Allowance From Ltd Co

[kaiser78]

Bear with me on this one please...

Now, I know that my limited company and myself are two separate entities and I am an employee of my limited company etc etc. My travel to current client co site is a 100 mile round trip by car daily. And I now know (from a previous post) that I can claim 40p travel cost/mile for first 10k miles to cover depreciation/servicing etc. So 40p on 100 miles = £40 / day which roughly = £800 / month.

Q1 - I always pay for petrol on my personal credit card as I get cashback, so I presume I claim this cost back as an expense from the ltd co as well as the 40p mile ? Or is the 40p designed to cover this ?

Q2 - I have always used my ltd company account as part of my warchest when I am not in contract, whereby I am still draw out my monthly salary/div payment when I am on the bench.

So, if I am taking the funds out to cover my travel costs, is this in effect dipping into my warchest, or should I see this as separate to the warchest ? I can't quite work the logic out in my head.

Thanks for any comments.

[mudskipper]

Bear with me on this one please...

Now, I know that my limited company and myself are two separate entities and I am an employee of my limited company etc etc. My travel to current client co site is a 100 mile round trip by car daily. And I now know (from a previous post) that I can claim 40p travel cost/mile for first 10k miles to cover depreciation/servicing etc. So 40p on 100 miles = £40 / day which roughly = £800 / month.

Q1 - I always pay for petrol on my personal credit card as I get cashback, so I presume I claim this cost back as an expense from the ltd co as well as the 40p mile ? Or is the 40p designed to cover this ?

Q2 - I have always used my ltd company account as part of my warchest when I am not in contract, whereby I am still draw out my monthly salary/div payment when I am on the bench.

So, if I am taking the funds out to cover my travel costs, is this in effect dipping into my warchest, or should I see this as separate to the warchest ? I can't quite work the logic out in my head.

Thanks for any comments.

The 40p per mile is intended to cover petrol as well as everything else.

It makes sense to claim your expenses - they are then tax free.

[kaiser78]

The 40p per mile is intended to cover petrol as well as everything else.

It makes sense to claim your expenses - they are then tax free.

Thanks - so just to clarify, I don't draw out funds to cover my personal petrol spend as well as the 40p mile ?

[mudskipper]

Thanks - so just to clarify, I don't draw out funds to cover my personal petrol spend as well as the 40p mile ?

No - the 40p includes petrol costs.

[diesel]

you will only save an exra £800 x 0.21 = £168 per week in your take home pay. Dont think you are earning £800 extra!

i do a round trip of 80miles/day, and its a bit of a b*gger that after 2 years one cant claim the mileage.

[escapeUK]

you will only save an exra £800 x 0.21 = £168 per week in your take home pay. Dont think you are earning £800 extra!

Exactly, this is something an awful lot of people seem not to understand!

This 40p a mile limit should really be 80p at least. The limit hasnt changed for a long long time, during which time fuel has probably doubled? If you are working for someone, then it probably seems reasonable, and this is why a lot of you are fooled. But when you are paying yourself out of your own money which would have been dividends it doesnt even cover the fuel cost. 8.4p a mile using Diesels calculation.

[stek]

Exactly, this is something an awful lot of people seem not to understand!

This 40p a mile limit should really be 80p at least. The limit hasnt changed for a long long time, during which time fuel has probably doubled? If you are working for someone, then it probably seems reasonable, and this is why a lot of you are fooled. But when you are paying yourself out of your own money which would have been dividends it doesnt even cover the fuel cost. 8.4p a mile using Diesels calculation.

And that 40p a mile drops to 25p a mile after 10k (ie after about 100 working days at 100 miles a day - about 4 months) making it even worse for the rest of the year.

[VectraMan]

So, if I am taking the funds out to cover my travel costs, is this in effect dipping into my warchest, or should I see this as separate to the warchest ? I can't quite work the logic out in my head.

I can't work out your logic there either.

It's an expense. If you invoice for £1000, but it costs you £500 in travelling expenses, YourCo has made £500. You're not dipping into the warchest, it's money you never really had.