Fuel Charges

esmithesmith Settling In NicelyRegistered Posts: 18

Can anyone advise on the best way to treat fuel costs?

I have a comapny with a director who wants to know the best way to claim his fuel costs (he has his own car but has been using company account to pay for all fuel)?
He also has a company van which is being used mainly for business mileage (as far as I know but i do need to clarify this with him).

I beleive he should claim for his business mileage on his own car at 40ppm, and take the fuel costs as drawings on his loan account and the fuel costs for the van will go through as business costs(assuming it is all business)!!

Am i right??



  • JodieRJodieR Experienced Mentor Registered Posts: 1,002
    Yes, that all sounds right to me. If there is personal use of the van it may be treated as a benefit in kind, depending on how much it's used personally.
    Also, remember that the 40ppm only applies to the first 10000 miles, after that it's 25ppm
  • payrollpropayrollpro Trusted Regular Hampshire/SurreyRegistered, Working Together with HMRC Posts: 418

    I wanted to add that for NIC purposes the 40 ppm applies for all the business mileage, it does not drop to 25p after 10,000 miles.

    Also be very careful over the van, HMRC is very particular over the proof needed to establish that any personal use still satisfies the rules. It's business use, plus commuting plus the occasional additional personal journey and he needs to keep good, detailed mileage records.

  • esmithesmith Settling In Nicely Registered Posts: 18

    He is keeping a detailed log of all mileage which is business/commuting but as it is a mobile beauty van how do you distinguish between business and commuting as she is travelling around all day?
    I presume you would just class the trips at the beginning and end of the day as commuting??
  • payrollpropayrollpro Trusted Regular Hampshire/SurreyRegistered, Working Together with HMRC Posts: 418
    Hi esmith,

    You are right, HMRC look at all travel from home to first place of work and last place of work to home as being the commuting journey. How much they would investigate this is anyones guess but as long as this fits their ideas of the business journeys it would be ok. My last look at this involved taking the total mileage for the year, less what was known to be true business and a reasonable allowance for commuting.

    We then compared the balance with what would be considered reasonable for "occasional private use". In this case it was less than 5% of the mileage left after all the legitimate mileage was taken out and that was more than covered by the new rules.

    We have to remember that the standard charge to be entered on the P11D is £3,000 when there is a company van and the only way to justify making that Nil is to have the records available to prove it. If we have any doubts over the evidence, or if there are too many miles left after business and commuting have been deducted then the correct procedure is to report a taxable benefit.

  • DavePDaveP Feels At Home Registered Posts: 79
    We do not have all the details but if the business is based from home then I would not be assuming any 'commuting' journeys.

    Does your client undertake any treatments from their own home?
  • esmithesmith Settling In Nicely Registered Posts: 18
    Hi Dave,

    Not from home the van is actually used for the treatments!!
    So they find areas to target and or come to you at work and do the treatments in the van.

    It may sound strange but its actually done really well the inside of this van in set up like the inside of a salon!
  • DavePDaveP Feels At Home Registered Posts: 79
    What a great idea!
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