Double entry for fuel allowance

MTJR

I'm having one of those days and getting my head in a muddle!

So, if a sole trader pays for their fuel from their personal bank account, it's partly for business and partly for personal use. They claim the 45p a mile fuel allowance - what is the double entry in the account?
Dr Fuel expense
Cr ??? is it drawings?

Thank you!

PeterC

I presume the 45p is based on the approved mileage allowance for employees, which represents running costs, not just fuel. Any reimbusement to the sole trader for business miles, using their own car, would be a normal business expense (Dr expenses Cr Bank). Any payment for personal mileage would be drawings.

MTJR

Sorry yes I meant the mileage allowance.
So for example, a sole trader has traveled 250 business miles in the month.

Mileage allowance (45p per mile) is £112.50

If the sole trader didn’t want to literally take this money out of the business but wanted the tax deduction as it’s an allowable expense, what would the double entry be?

MTJR

If it was a limited company, I’d Dr expenses Cr Director’s loan account, but I’m not sure what the Cr entry would be for a sole trader if they aren’t actually taking the money out of the business. Credit Capital?

douglasstroud

Debit - Motor Expenses
Credit - Capital Introduced

MTJR

Thank you!