Use of Own Car for Travel

[mike1227]

Hi,

I have my own limited company and travel to my client's office each day (approx. 20 miles) using my own private car. I currently treat this as a business expense at the usual 40ppm (below 10k).

My client now wants me to travel to some of their potential new customers' offices over the coming weeks, some up to 200 miles away, and I was wondering whether I can claim back this cost (i.e. wear and tear and fuel) from my client or do I just treat this as an expense to my own business?
I would prefer to do whatever is best to avoid being caught by IR35.

Mike.

[Epiphone]

If the extra travel wasn't part of the original contract tell your client you have no problems with it bu it will be charged per mile. Why not do it for more than 40p and make a profit.

[malvolio]

Strictly speaking you should discount the mileage you would normally travel every day, but yes, this is an additional and fully billable cost. 40ppm would be nice and a good starting point, but I usually try to align to whatever the client's local rates are; better to have some recovery than none!

[Bluebird]

I believe that your Co can Invoice the client for the extra milage, but also you can pay the money direct [ at the rate of 40ppm ] from your co to you as an employee so you avoid paying tax on it as well.

All assuming you don't break the 10k [?] PA limit.

Is that right?

[malvolio]

No, I think you're confusing a couple of things with each other.

Unless you agree so in your contract (which would be nice...), daily travel to the usual client site is not normally chargeable to the client. You can however claim the mileage as a a personal expense at 40p/25p without incurring a BIK (you can be like an MP and claim a lot more per mile if you want, but you will pay tax on it so there's no point really).

Exceptional travel should be charged to the client since it represents an additional business cost outside the normal arrangements. But you still claim 40p/25p per mile as personal expenses regardless. The only difference is that YourCo is recovering the cost rather than losing it as cost of sales.

Clear?

[Bluebird]

No, I think you're confusing a couple of things with each other.

Unless you agree so in your contract (which would be nice...), daily travel to the usual client site is not normally chargeable to the client. You can however claim the mileage as a a personal expense at 40p/25p without incurring a BIK (you can be like an MP and claim a lot more per mile if you want, but you will pay tax on it so there's no point really).

Exceptional travel should be charged to the client since it represents an additional business cost outside the normal arrangements. But you still claim 40p/25p per mile as personal expenses regardless. The only difference is that YourCo is recovering the cost rather than losing it as cost of sales.

Clear?

Thought that was what i said....

[malvolio]

Thought that was what i said....

Actually, re-reading it, you did. Oops!

Note to self - read the damn posts properly before replying...

[mike1227]

Thanks all for your comments, much appreciated.

Mike.

[css_jay99]

I believe that your Co can Invoice the client for the extra milage, but also you can pay the money direct [ at the rate of 40ppm ] from your co to you as an employee so you avoid paying tax on it as well.

All assuming you don't break the 10k [?] PA limit.

Is that right?

Is the 10k limit for the Tax year or company accounting year?

cheers


css_jay99

[KevinS]

Is the 10k limit for the Tax year or company accounting year?

Personal tax year (so rolls over on April 6th)..