Accounts preparation for someone using mileage rates for motor expenses
hsodhih
Registered Posts: 12 New contributor 🐸
Hi,
I needed to establish that if a self employed person is claiming motor expenses based on mileage rates, how do we draft his accounts (P+L and balance sheet)
Do we do his P+L and balance sheet as per actual spending and claim depreciation as an expense on P+L
But when we file the Tax Return, we exclude the actual spend and include the expense for motor expenses based on the miles rate?
Thanks
I needed to establish that if a self employed person is claiming motor expenses based on mileage rates, how do we draft his accounts (P+L and balance sheet)
Do we do his P+L and balance sheet as per actual spending and claim depreciation as an expense on P+L
But when we file the Tax Return, we exclude the actual spend and include the expense for motor expenses based on the miles rate?
Thanks
0
Comments
-
The accounts should be on the mileage rate as well and then do not include the vehicle as an asset and therefore no depreciation.Regards,
Burg0 -
But what about balance sheet i.e. cash or bank account, how will that tally up?
As out of bank lets say £5500 has gone out as motor expenditure, but if we are showing £6000 as motor expenses as per mileage rates, how do we account for the difference of £500.
Thanks0 -
The £5,500 needs to go to drawings as technically this is private.
Then bring in the mileage basis either by reducing drawings or putting as capital introduced.Regards,
Burg0 -
Thank you Ian, very well explained, thanks alot0
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