Help with tax return

Tracy Anne Hay

Trying to do my friends tax return he does window cleaning. He is looking after the business for a friend as he is not well. He uses his van and doesn't pay anything for it except the fuel cost. As its a favour his friend covers the insurance etc. so I am unsure how it fits into his tax return. Was thinking just the milage charge but its not something I have come across before. Thanks for any help

Kelly7

I did Itax back in September but I am thinking that you can't claim for mileage unless you can prove it's business mileage which is very hard and why most people do not claim for this?
Kelly

mentorkeith

Tracy Anne Hay wrote: »

Trying to do my friends tax return he does window cleaning. He is looking after the business for a friend as he is not well. He uses his van and doesn't pay anything for it except the fuel cost. As its a favour his friend covers the insurance etc. so I am unsure how it fits into his tax return. Was thinking just the milage charge but its not something I have come across before. Thanks for any help

Hi Tracy

Before I can help, would you please explain the situation a bit clearer. Your friend is a window cleaner and yet he does it for his friend (another friend)? If it is HIS friend's business then why are you concerned about the tax return for YOUR friend? If the business belongs to HIS friend then why is it a favour to pay the insurance? Surely if the business belongs to his friend then the insurance is a normal cost of the business.

Certainly if the fuel bills are kept, that IS proof of the mileage. HMRC DO recognise that Vans (not cars) are usually bought for business use, so the depreciation cost can be included in the Income Statement and therefore (as I understand it) can be deducted within the taxed profits on the tax return (having not yet started Business Tax, someone please correct me if there are specific rules regarding depreciation), as can the insurance, road tax (any expenses related to the business).

Is the business VAT registered? If so, then there are other rules regarding input and output tax for fuel.

Edited Section:
Since I wrote that reply, I have given it some more thought by trying to figure out what you are saying. On that basis I need to ask more questions.

Are we talking about 2 completely different businesses; one for your friend and one for your friend's friend? Is your friend charging fees or getting a wage from his friend's business?. How does it work?

To claim relief on fuel bills, it would need to be a business expense of your friend's business. Does your friend's friend account for the insurance in his/her income statement? Without more information it is impossible to give proper advice because the situation is not clear enough.

You state "He uses his van". That is not a clear statement because it could be taken in two ways: "your friend uses his own van (not his friend's van)" or "he uses his friend's van. So, who owns the van?