Business mileage receipts ?

[Jakes Daddy]

As a permie, I've just been told by my current employer that from now on to claim mileage as expenses I have to submit a VAT receipt that at least covers the amount that I am claiming. Apparently its a new rule that was rushed in at the beginning of the year (http://www.fsn.co.uk/channel_financi...balexpense.htm)

I am planning on going contracting and will of course be claiming business mileage. I will be operating under an umbrella, and wont be VAT registered. Does this ridiculous red tape excercise affect contractors under a brolly ?

Cheers

Nathan

[threaded]

In Denmark you can claim milage expenses for riding a bike or even walking.

[Lucifer Box]

You can claim mileage for riding a bike in the UK too. In fact you can claim tax relief on the cost of the bike also, as someone pointed out the other day.

[foritisme]

From what I have read it only affects those with a company car. If you pay yourself a mileage allowance for using your own car then there is nothing to worry about (yet !)

[ASB]

and will of course be claiming business mileage

That (surprisingly) is not necessarily the most tax efficient way.

If you claim the mileage as an expense then it will reduce your profit figure. This in turn will effectively mean you get CT relief on that at something between 0 and 22.5% whatever the marginal CT rate you end up paying.

Your alternative would be to claim it as an allowance against income on you tax return. If you are a 40% taxpayer this can be much more efficient.

I know you mentioned you were going through a brolly, if it pays you PAYE then it won't make any difference but if it's some form of composite or pays you dividends for some of your income then it might.

[tim123]

You only need to do any of this if you wish to reclaim the VAT.

And it probably does apply to milage in own car as well.

tim

[foritisme]

The allowance you pay yourself for using your own car is not just about the petrol - it is to cover general wear and tear for the business miles you are claiming.

[DaveB]

On a related note, I've just been told by my accountants that I can now claim 2p per mile in VAT on travel expenses rather than 1p.

Only for those not on Flat Rate VAT of course.

[freshblue]

All UK employers are affected (good old EC strike again) so a brolly is no different, right royal PIA but only way UK could keep the VAT reclaim.

Thanks France/Germany..

[VectraMan]

Well I'm with Parasol (who I'd recommend BTW), and they haven't told me anything has changed - so no need to keep any petrol receipts. Just put in my mileage claim for January, and I assume as it's home to work and back, it's pretty simple for anyone to check up on without looking at the actual cost.

I've been doing 195 miles per day, but at 40p per mile tax relief I was actually making a very small profit , although that only includes petrol and not other wear and tear. Now I'm down to 25p per mile (after 10,000 miles in a year) and it's costing me a few pounds per day.