Accounting Terminology

**mudskipper** · 17 February 2013, 15:58

Originally posted by sapsaint View Post

Hi there
Was wondering if somone could help me.
Im completely new to contracting - and i am currently getting to grips with getting my books in order.
Ive just signed up with Clearbooks and i am in the process of importing all my sales/purchases.

Im struggling to determine which categories the following purchases need to be allocated to. Can someone help me?

Purchases:
- Fuel for vehicle.
- Cofee paid for during business meeting.

Categories Available:
- Cost of sales
- Cost of sales
- labour
- materials
- CIS labour cost (20%)
- Other income
- Reclaimed expenses
- Administrative Expences
- Salaries
- PAYE
- Employees NIC
- Employers NIC
- Pension
- Rent and Rates
- Heat and lighting
- Insurance
- Telephone
- Internet
- General Admin
- Subscriptions
- Printing and Stationary
- Cleaning
- Postage Packaging
- Travel
- Mileage
- Subsistance
- Advertising
- Marketing
- Accounting Fees
- Legal Fees
- Entertaining Staff
- Entertaning Client
- Operating Costs

Thanks i advance.
SAP

Normally you wouldn't claim fuel, you'd claim a flat rate mileage - 45p per mile <= 10K miles. That goes under mileage.

Food/drink goes under subsistence - make sure you keep receipts.

**sapsaint** · 17 February 2013, 16:03

Wow - that was a quick response!!

Im setup as a limited company - and i pay for my fuel using my business account.
The vehicle is however being used for both personal and business purposes.

Given that im paying for the fuel using my business account, do i not record this in my accounts?
Im still confused about how to log the fuel expense...

Thanks

**Sockpuppet** · 17 February 2013, 16:31

Originally posted by mudskipper View Post

Normally you wouldn't claim fuel, you'd claim a flat rate mileage - 45p per mile <= 10K miles. That goes under mileage.

Only if its not a company car!

**sapsaint** · 17 February 2013, 16:45

Still a little confused.
Im a contractor setup as a limited company.
I use my vehicle for both personal and business use.
Im making sure i keep a record of the mileage when doing business trips.

My question is - eveytime i fill the tank, i use my business card.
Do i not record these transactions as they will show on my business bank statements.

Thanks

**northernladuk** · 17 February 2013, 16:59

Get an accountant. Sounds like by giving you some straight advice he could be saving his rate. Don't run your accounts based on guesswork and free internet forums. You are legally responsible for your finances and if you cock it up there is no end of trouble that can come your way. You are a business now so get an accountant to at least help you for the first year.

**mudskipper** · 17 February 2013, 17:02

Originally posted by sapsaint View Post

Still a little confused.
Im a contractor setup as a limited company.
I use my vehicle for both personal and business use.
Im making sure i keep a record of the mileage when doing business trips.

My question is - eveytime i fill the tank, i use my business card.
Do i not record these transactions as they will show on my business bank statements.

Thanks

You're making things very complicated for yourself. Assuming the car is a personal vehicle which you also use for business (make sure your insurance covers this) then fill the tank with your own money, and claim the 45p per mile. By putting fuel on the company card, you'll need to apportion part of it for personal use. Check with your accountant - you may be able to offset what you've already put on the business card against expenses, or call it a director's loan.

If you haven't got an accountant you really do need one, at least for the first year or two till you know what you're doing. And have a read of the First Timers guides. ----->

**JoJoGabor** · 17 February 2013, 19:06

I cannot ephasise this point enoughg. Get an accountant at least for the first two years. No accounting software will help you avoid the pitfalls

**Greg@CapitalCity** · 18 February 2013, 08:00

Originally posted by sapsaint View Post

My question is - eveytime i fill the tank, i use my business card.
Do i not record these transactions as they will show on my business bank statements.

See, you could also use your business card to pay for your next holiday to the Med. The point here is, just because you are using your business card to pay for fuel, does not mean it is an allowable business expense. I would suggest you;
(a) Record the fuel amount into your Directors Loan account;
(b) Pay the same amount of money back into your business account (from your personal bank account) to reverse the Directors Loan charge;
(c) Start booking the cost of travel against the 'Mileage' category at 45p per mile, and also use your personal CC when paying for your fuel;

**ASB** · 18 February 2013, 11:42

Originally posted by Greg@CapitalCity View Post

(c) Start booking the cost of travel against the 'Mileage' category at 45p per mile, and also use your personal CC when paying for your fuel;

Greg

[ot]

Is it still the case that for a higher rate taxpayer it may be possible to obtain more relief by not claiming the expense from the company (obviously this will attract CT due to the increased the profit).

Instead claim it via the SATR (in which case relief can be obtained at ones highest tax rate?

Though it does depend on the source of ones income, if it is all from the company then the higher tax paid on dividends in the first place will neutralise it, but if there is income from a different source e.g. savings income it could end up being beneficial (but possibly not actually worth the effort of working out).

[In my case I had various income streams and was able to reduce my tax bill by a couple of hundred overall; or maybe I just calculated it wrongly

]

Accounting Terminology