Excessive mileage claim

JodieR

A director of a company has been paying themselves 45p per mile and forgot to switch to 25p per mile after 10000 miles and has therefore over-claimed mileage for 2011/12. Will this have to be treated as a benefit in kind or can they get around this by repaying the excess? or by putting an adjustment through director's loan account?

ademoore

For now, I would put it through the DLA, make the client aware of what has happened and put a control in place to try to mitigate this happening in the future - i.e give them a spreadsheet with cumulatives so they can see the miles adding up.

I would then give the client options as to what they do next.
If their DLA will be under the £5k mark, and if profits allow, you could write off as a dividend
You could offer option of repaying the money, a certain amount each month to soften the blow

First option is cheaper to the client, as they just pay the tax on it, as opposed to the whole amount, tax rate depending on their income of course.

groundy

I would just adjust through the directors loan