Driving to work

[Gros]

Hi. Looks like I may have secured a contract, finally after nearly 3 months without anything. However I will have to drive to work.

It's via a recruitment agency, and I work under my own limited company. Does this constitute business use as far as my own personal motor insurance is concerned?

Also is my mileage/fuel classed as an expense which I can claim? (Sorry I know this is talked about a lot, but it always seems personal to someone's situation and I'm not sure).

Thanks for any help.

[NotAllThere]

Search for two year rule in addition to the following:

40p a mile.
VAT component claimable (or it? I forget what happened).

As far as insurance is concerned, you have to make sure that ordinary commuting is covered. You might, depending on insurance company, also require class 1 business use (using for work purposes, but not in motor trade, not a salesman, not for hire).

[VectraMan]

Your car insurance probably says something like "including commuting to a permanent place of work", so for a contract being temporary you really ought to have business use. It is a little bit of a grey area though. I have it (on both cars) - doesn't cost much extra if at all.

And if it's temporary, then of course you can claim mileage expenses at 40/25p per mile, and reclaim the VAT if you're registered and not on the FRS.

[Gros]

Great, thanks for the advice.

I did indeed need to alter my car insurance to cover commuting, but it was only £13 until the end of the policy in August, so not too bad.

I'll do some digging on the expenses situation.

[Pacman]

I have business use on my insurance, as technically I'm visiting the client's site in the guise of my LTD. For the extra few quid, its a no-brainer, you're always covered then.

[Gros]

Sorry to dig this up again, but just to clarify...

1) I assume this is simply a case of me claiming 40ppm as expenses which I can pay myself, which is then not included in profits eligible for corporation tax?

2) I'm VAT registered, does that make any difference, and what do you mean above by VAT component claimable?

3) This isn't something I can claim from my employer I presume?

Cheers.

[blacjac]

Sorry to dig this up again, but just to clarify...

1) I assume this is simply a case of me claiming 40ppm as expenses which I can pay myself, which is then not included in profits eligible for corporation tax?

2) I'm VAT registered, does that make any difference, and what do you mean above by VAT component claimable?

3) This isn't something I can claim from my employer I presume?

Cheers.

1. Correct. But you should also keep a log of trips as the amount you can claim reduces from 40ppm to 25ppm once you have done 10,000 miles in the tax year.

2. It depends if your are registered for the VAT Flat Rate Scheme or not.

3. I assume that as you talk about corporation tax you have your own Ltd comapny. THIS IS YOUR EMPLOYER. Weather or not you can claim expenses back from your client is between you and your client. If it's not mentioned in the contract between your company and the client, then you can't.

[Gros]

Thanks blacjac.

Yes, you're correct in your assumptions.

- I'm registered in the flat rate scheme for VAT. How does that affect this?

- Also, do I need to keep detailed records, petrol receipts etc?

[gadgetman]

FRS - no VAT claimable on this, so just claim the 40p per mile.

I keep a spreadsheet of all trips (to, from, date, mileage, cumulative mileage and amounts claimed). Once you go over 10000 you claim at 25p per mile.

You should keep the petrol receipts to prove you've actually done the miles. You do not claim for the cost of the petrol itself.

Thanks blacjac.

Yes, you're correct in your assumptions.

- I'm registered in the flat rate scheme for VAT. How does that affect this?

- Also, do I need to keep detailed records, petrol receipts etc?