Motor Expenses

jilbo

I have a new client, a self-employed hairdresser who rents a chair at a city centre salon. His previous accountant has included on has tax return £1200 motor expenses and £130 use of home. He has done this for the last two years to my knowledge and maybe longer.

The £130 was mentioned by my client in passing a few weeks ago, he said it was put in by his accountant as this was a figure that would not be investigated! I haven't spoken to him about the motor expenses yet as I only received the bundle form his accountant late last week and read through it all last night.

I have always told my hairdresser clients that motor expenses to and from work are not allowable, but they can claim mileage for trips to home based clients or to wholesalers for products. Am I being squeaky clean here? There's no way any mileage would amount to £1200. Is it the norm for accountants to include made up figures for expenses just because it is 'what can be got away with, HMRC won't bother looking into it' or am I missing something?

Any comments would be greatly appreciated.

T.C.

You are right to be cautious. I am sure HMRC would query those sort of motor expenses for a hairdresser - unless she is a mobile hairdresser of course. My hairdresser client claims only about £250 per year and I ask for all receipts. Stick to your principles.

JodieR

jilbo wrote: »

The £130 was mentioned by my client in passing a few weeks ago, he said it was put in by his accountant as this was a figure that would not be investigated! I haven't spoken to him about the motor expenses yet as I only received the bundle form his accountant late last week and read through it all last night.

Have a look at http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm, amounts of £104 won't be queried, so £130 is probably still very safe.

But yes, I agree with you on the mileage - seems excessive to me! My hairdresser client rarely claims over £150 a year for mileage.