Reply to: Fuel Expenses

[Billy Pilgrim]

With about 5 seconds of effort i was able to find a whole host of information, not just on this but on a range of questions you will post at somepoint..

Here

Guide to

In fact bugger it...

Here is the search result I used... Happy reading...

Google search

Well I never knew that ....

"If you are traveling to work as a passenger in a car you are entitled to claim 5p per mile."

[Wanderer]

Good post, KenW!

Regarding your colleague only claiming 10ppm - he/she can claim the shortfall on their tax return i.e. 30ppm

It is likely that the colleague has a fully expensed company vehicle and they only pay for fuel which is what the 10ppm is supposed to cover (almost). If you use your own vehicle which you brought, taxed, insured, service yourself then you claim the full 40p per mile. (24p for a motorbike, 20p for a bicycle if I remember correctly)

[KenW]

Good afternoon all!

I have been having a look around (and forgive me if there is something there about this but I have missed it) to see if I can find any clarity over fuel expenses. I have found threads about leased cars etc but nothing for personal cars and mileage. One of my colleagues claims 40p per mile on his personal car and puts this through his Ltd company as an expense. Another one of my colleagues only claims 10p per mile. So I am not sure how much you can take. I have readt threads relating to the first 10,000 miles etc but I cant work out what (if anything) I am entitled to claim back through my Ltd company for fuel. I dont think there is any point in leasing a car through the company so I just wondered if my fuel costs were a ligitimate expense?

Thanks in Advance.

My understanding is that the Approved Mileage Allowance Payment (AMAP) of 40p per mile (ppm) is to cover all your mileage expenses so you cannot then claim for fuel separately. If you are using your own car, the main things to remember are:
- 40ppm for the first 10,000 miles then 25ppm
- you can claim for journeys by van, motorbike and bicycle too
- no need to record the annual claim amount on the p11d as long as you don't exceed the AMAP rate
- don't pay yourself more than this because you will have to pay tax and National Insurance on it as well as add it to your p11d
- if you employ anyone else, you can claim up to 5ppm for carrying them as a passenger, as long as you are all travelling on the same business trip
- use your home as a base when calculating the distance to work, HMRC will treat the trip as business travel (and not a commute) as long as you do not expect to be travelling this route for more than 2 years. As soon as you do, contact your accountant and get advice.
- keep a log of all the business trips. You need to log the date, the from and to locations, the reason and the distance.

Regarding your colleague only claiming 10ppm - he/she can claim the shortfall on their tax return i.e. 30ppm

[cojak]

"Under the new legislation, employers will only be able to claim back VAT from business mileage if each claim is supported with a valid VAT receipt for the fuel purchased. This is a change to the current practice which allows companies to recover VAT without the need to provide any supporting VAT documentation."

" If fuel receipts are not present the VAT element of the mileage claim will be reversed at an HMC&R inspection, forfeiting this amount and potentially incurring penalties for incorrect reporting."

Where does it say "employees will only be able to claim 0.40 per mile for business travel if each claim is supported with a valid VAT receipt for the fuel purchased" or "If fuel receipts are not present, the WHOLE claim will be reversed" ?

It is all about VAT ..

I'm on FRS too and my accountant does not want the receipts and my accountant can beat up your accountant.

I'll go back and have a quiet world with the man, then...

[ASB]

Cojaks link is to a councils internal policy and actually says they only want a receipt for milage claims in excess of 250 miles. The BFCA quote you givce supports what I said. Technically you dont need a receipt, just proof of expenditure and a record of milage done unless you are claiming back the VAT.

Correct. The receipt is only required in support of VAT claims. Strictly all that is required is enough receipts to cover the VAT being reclaimed over the period it is being claimed for.

I won't start on my employers policy on the above; save for the fact that my car does 400 miles on a tank, I claim about 300 miles a month; each expense claim has to have a receipt for fuel if it includes mileage. Each claim can only include expense related to one project. Curiously I now spend rather more on Taxis.

Don't forget to claim up to 40p/25p on ones tax return if reimbursed at a lower rate. There are circumstances in which NOT claiming any mileage from an employer can be more cost effective if you happen to own the employer.

[Lumiere]

No it isn't - I'm on FRS and my accountant still wants receipts. It is against fraud, apparently.

"Under the new legislation, employers will only be able to claim back VAT from business mileage if each claim is supported with a valid VAT receipt for the fuel purchased. This is a change to the current practice which allows companies to recover VAT without the need to provide any supporting VAT documentation."

" If fuel receipts are not present the VAT element of the mileage claim will be reversed at an HMC&R inspection, forfeiting this amount and potentially incurring penalties for incorrect reporting."

Where does it say "employees will only be able to claim 0.40 per mile for business travel if each claim is supported with a valid VAT receipt for the fuel purchased" or "If fuel receipts are not present, the WHOLE claim will be reversed" ?

It is all about VAT ..

I'm on FRS too and my accountant does not want the receipts and my accountant can beat up your accountant.

[northernladuk]

You drive to Cornwall for a short break and then work from home for a few days, what stops you including your fuel receipt for the fuel you had burned in Cornwall in your mileage claim ? Same thing really.

I am sure they have means of investigating this - reconciling to your other expenses, speaking to your client, checking mileage between MOTs etc.

Very true and on the flip side there are people that have work horse cars and wouldn't dream of doing much personal mileage and so their fraudlent work mileage still out weighs their reciepts for the claim so still get caught. It isn't infalible but something they may look at.

I guess it is about your aversion to risk and some common sense. You are right you can include the Cronwall trip but that would be making you even safer and harder for HMRC to string you up as you have evidence of your work AND personal mileage. Having a family car and only enough evidence to cover what you claim is going to raise some eyebrows as you should have some personal stuff on there as well?

Either way, getting a bit stuck in individual situations. Bottom line is technically you don't need to but common sense and good practice seems to say keep them.

No it isn't - I'm on FRS and my accountant still wants receipts. It is against fraud, apparently.

I would be much happier with my accountant erring on the side of caution and keeping me totally covered for all eventualities than one that tells me technically I don't have to and then walking off when the crap hits the fan I guess.

[cojak]

I believe Cojak's link is slightly off-topic
It is about keeping fuel VAT receipts when you are going to claim this VAT back.

No it isn't - I'm on FRS and my accountant still wants receipts. It is against fraud, apparently.

[Lumiere]

You work from home a few days a week 40 miles x 2 x number of days you travelled there = easy money

What is stopping you do this? Might be a daft question if I can't find what I am looking for of course

You drive to Cornwall for a short break and then work from home for a few days, what stops you including your fuel receipt for the fuel you had burned in Cornwall in your mileage claim ? Same thing really.

I am sure they have means of investigating this - reconciling to your other expenses, speaking to your client, checking mileage between MOTs etc.

[DaveB]

Cojacks link directly disputes this and I am dam sure I would feel happier with a fist full of reciepts than hoping that digging back thru my accounts will do.

Anyway, got other stuff to do and all I could find was the following from our very own BFCA's website as it happens... Haven't read it all as I have run out of time on this but here you go. Guess what I was told was to use common sense and keep them rather than some legislation

BFCA Info

Record Keeping

EIM31390 and Sections 229 and 230 ITEPA 2003 are clear about record keeping requirements, and it is essential to have "reasonable evidence" to support claims.

If your business journey is the same each day then you do not necessarily have to measure the mileage every day: measure once and record how many days you made the journey by recording the destination on your report sheet.

If you want the "belt and braces approach" , then keep all your fuel receipts and store them in an envelope per month. This adds weight to the evidence you are keeping that you incurred costs and made the journeys. For instance using a petrol station on the journey is very good evidence of the journey having taken place as the receipts has the name of the petrol station, date and time on it. You may think this is "overkill" but if an HMRC inspector really wanted to challenge the fact that you made the journey, what better evidence to have collected ?

Cojaks link is to a councils internal policy and actually says they only want a receipt for milage claims in excess of 250 miles. The BFCA quote you givce supports what I said. Technically you dont need a receipt, just proof of expenditure and a record of milage done unless you are claiming back the VAT.

[Lumiere]

Well I can't find what I thought was the case about keeping receipts to prove you are doing what you say in case of an investigation. I guess Cojacks link covers it

I believe Cojak's link is slightly off-topic
It is about keeping fuel VAT receipts when you are going to claim this VAT back.

[northernladuk]

Technically you dont need a receipt, you just need proof of expenditure if you are not claiming back any VAT. Bank or credit card statements will do just as well.

Cojacks link directly disputes this and I am dam sure I would feel happier with a fist full of reciepts than hoping that digging back thru my accounts will do.

Anyway, got other stuff to do and all I could find was the following from our very own BFCA's website as it happens... Haven't read it all as I have run out of time on this but here you go. Guess what I was told was to use common sense and keep them rather than some legislation

BFCA Info

Record Keeping

EIM31390 and Sections 229 and 230 ITEPA 2003 are clear about record keeping requirements, and it is essential to have "reasonable evidence" to support claims.

If your business journey is the same each day then you do not necessarily have to measure the mileage every day: measure once and record how many days you made the journey by recording the destination on your report sheet.

If you want the "belt and braces approach" , then keep all your fuel receipts and store them in an envelope per month. This adds weight to the evidence you are keeping that you incurred costs and made the journeys. For instance using a petrol station on the journey is very good evidence of the journey having taken place as the receipts has the name of the petrol station, date and time on it. You may think this is "overkill" but if an HMRC inspector really wanted to challenge the fact that you made the journey, what better evidence to have collected ?

[cojak]

Here's advice from a council...

It really isn't that difficult to google...

I just ask for and scan me receipts to the mileage.

[DaveB]

Well I can't find what I thought was the case about keeping receipts to prove you are doing what you say in case of an investigation. I guess Cojacks link covers it but I am sure there was something about this much later. I withdraw anything I said about that the particular topic as I can't back it up.

Either way, spending anything and claiming it back in somehow on the company and not keeping receipts just incase isn't the best way to operate IMO. You are going to be in the mire IF and that is a big IF you are investigated. Easier just to ask for a receipt IMHO....

Guess it is like insurance, you can get away with it until it goes wrong.

Technically you dont need a receipt, you just need proof of expenditure if you are not claiming back any VAT. Bank or credit card statements will do just as well.

[northernladuk]

Well I can't find what I thought was the case about keeping receipts to prove you are doing what you say in case of an investigation. I guess Cojacks link covers it but I am sure there was something about this much later. I withdraw anything I said about that the particular topic as I can't back it up.

Either way, spending anything and claiming it back in somehow on the company and not keeping receipts just incase isn't the best way to operate IMO. You are going to be in the mire IF and that is a big IF you are investigated. Easier just to ask for a receipt IMHO....

Guess it is like insurance, you can get away with it until it goes wrong.