Mileage Allowances ??

emma1801
emma1801 Registered, AAT Licensed Accountant Posts: 56 Regular contributor ⭐ ? ⭐
Hi Can some one please help,

I have a new sole trader client who uses a van from one of his customers on a daily basis.
He pays for the fuel he uses.

My question is can he claim mileage allowance also ??

Thanks.

Comments

  • groundy
    groundy Registered Posts: 495
    No. Not if he doesnt own the van, plus he is claiming for the fuel he uses.
  • PGM
    PGM Registered Posts: 1,954
    I don't believe he can claim mileage allowance at all, as the running costs which the allowance covers is paid for by the customer that lends the van (if I'm reading it right?)

    So all he can claim is direct costs ie fuel.
  • emma1801
    emma1801 Registered, AAT Licensed Accountant Posts: 56 Regular contributor ⭐ ? ⭐
    thanks for your quick responses, what if he was paying for the upkeep of the van ie: running costs

    would that make a difference?
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    If any money he pays out is wholly and exclusively for business, he can claim that.
  • jamesm96
    jamesm96 Registered Posts: 523
    I suppose, if he were paying toward the running costs too (i.e. effectively renting the van) and he were paying privately, you could argue that the business could justifiably pay him a mileage rate to reimburse him for the the use of a vehicle which he had privately rented, in much the same way as if he had a personal vehicle (on contract hire) which he then used for business purposes.

    Perhaps I'm trying to be too cunning, though.
  • emma1801
    emma1801 Registered, AAT Licensed Accountant Posts: 56 Regular contributor ⭐ ? ⭐
    The company would not be happy to do that thou, the way they see it is he is using it so he should pay for the upkeep.

    Has anyone any more tax saving ideas?

    Thanks
  • jamesm96
    jamesm96 Registered Posts: 523
    emma1801 wrote: »
    The company would not be happy to do that though

    Sorry... they wouldn't be happy to do what?
  • stevo5678
    stevo5678 Registered Posts: 325
    Monsoon wrote: »
    If any money he pays out is wholly and exclusively for business, he can claim that.

    I think Monsoon has already answered your question. What ever he pays which relates to his business he can claim. If you have to split it with private use then just claim a proportion. This includes fuel and running costs.

    It could be more complicated from his personal tax position as he is receiving the use of a van that he does not own. He may need to make good his private use. I'm not sure on the last bit.
  • emma1801
    emma1801 Registered, AAT Licensed Accountant Posts: 56 Regular contributor ⭐ ? ⭐
    Mike James - i meant the business who he uses the van from will not be happy to pay any mileage allowance.

    Thanks Steve.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    emma1801 wrote: »
    Mike James - i meant the business who he uses the van from will not be happy to pay any mileage allowance.

    Thanks Steve.

    I think Mike meant the guy's own business could pay him a mileage rate. There would be no justification for the owner of the van to both lend him a van AND pay a mileage rate.
  • emma1801
    emma1801 Registered, AAT Licensed Accountant Posts: 56 Regular contributor ⭐ ? ⭐
    Monsoon / Mike I am confussed now can my sole trader or cant he?

    Groundy says
    No. Not if he doesnt own the van, plus he is claiming for the fuel he uses.
  • jamesm96
    jamesm96 Registered Posts: 523
    emma1801 wrote: »
    Monsoon / Mike I am confussed now can my sole trader or cant he?

    There's the separation (from a business tax point of view) of your client as an individual, and the sole-trade business he runs.

    I think that if the arrangement to use the van is between the customer and him personally, then he as an individual can charge his own sole-trade business 45p per mile for the business use of that van.
  • emma1801
    emma1801 Registered, AAT Licensed Accountant Posts: 56 Regular contributor ⭐ ? ⭐
    Thanks James that totally makes sense.

    Do you know is there a maximum to the amount of miles he can claim?

    Em
  • honada
    honada Registered Posts: 28 Dedicated contributor ? ? ?
    Up to 10,000 miles he can claim 45p and over 10,000 he can claim 25p there is no specific maximum amount however he should keep a record for the business mile travelled.

    Honada
  • Raging Pineapples
    Raging Pineapples Registered Posts: 110 ? ? ?
    Just for the sake of future-proofing the thread in case anyone else needs it:

    Remember to keep up to date with HMRC here:
    http://www.hmrc.gov.uk/rates/travel.htm

    If the threshold or rates change in the future, you'll find the most up-to-date figures in the link above.
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