Mileage Allowance

Antoinnette
Antoinnette Registered Posts: 118 ? ? ?
I have a little question concerning mileage allowances. If someone has in the past claimed mileage allowances as part of employment expenses and used the AMAP, when they become self employed can they use a percentage of fuel instead? My position is that its the same car and since he has been claiming 0.40p for five years already he cant change it even if he is now self employed. But apparently his cousin who used to work for hmrc tells him he can claim 80% of his fuel costs. He doesnt want to claim for anything else apart from the fuel...

Apart from the AMAP being simpler I suspect this is rather bad advice but thought I would ask anyway just to be sure.

Comments

  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    I have a little question concerning mileage allowances. If someone has in the past claimed mileage allowances as part of employment expenses and used the AMAP, when they become self employed can they use a percentage of fuel instead? My position is that its the same car and since he has been claiming 0.40p for five years already he cant change it even if he is now self employed. But apparently his cousin who used to work for hmrc tells him he can claim 80% of his fuel costs. He doesnt want to claim for anything else apart from the fuel...

    Apart from the AMAP being simpler I suspect this is rather bad advice but thought I would ask anyway just to be sure.

    If his turnover is less than the vat registration threshold he can continue to use amap's.

    OR

    Alternatively, you could put through all motor expenses and then disallow a percentage that relates to private use. In addition, you could even bring in the market value of the car into the accounts, and then disallow a % of the wda's that relates to private use.

    The choice is yours/client's.
  • Antoinnette
    Antoinnette Registered Posts: 118 ? ? ?
    Thanks for the quick reply reader. His turnover was just under 7000 so he is way below the VAT limit. The problem is that he was self employed for only six months and went back to PAYE. For that short space of time is it worth capital allowances etc. Especially as he cant be bothered to find the paper work for all motoring expenses for the car.
    He is a rather forgetful man and terrible at record keeping. At least I have a log of every work appointment he had during the period and thats why I am inclined to use the amap's instead of just using fuel receipts which is all he seems to have kept very well.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Based on what you've said, do 40p a mile.
  • Laura8192
    Laura8192 Registered Posts: 95 ? ? ?
    Is it 40p a mile as I thought it was 45p a mile but I may well be missing something?
  • Antoinnette
    Antoinnette Registered Posts: 118 ? ? ?
    Laura8192 wrote: »
    Is it 40p a mile as I thought it was 45p a mile but I may well be missing something?
    Its 0.45p now but for prior years it was 0.40p
  • Laura8192
    Laura8192 Registered Posts: 95 ? ? ?
    oh ok that makes sense :-)
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