I have a client who has set up as a ltd company re CIS and fuel diesel goes through for van = fine
However he has made his wife a director of the ltd co as well (49% share). She does nothing as such for the business just a director on paper - may buy the odd bit of stationary or book of stamps etc but thats about it
I have started to note some unleaded fuel receipts go through - is it turns out for wife car.
I know that all fuel can be claimed if vat fuel scale charge is processed .... BUT ..... given the little involvement of the wife in the company is that acceptable ... i may be overthinking it here but in my eyes for the so little amount of fuel of hers that would be business can it be justified putting it all through even with a vat fuel scale charge????
Any thoughts would be welcomed pretty please and thanks in advance
So this shareholder/director wife does no work - so how can she justify the miles she has done? If this is her personal vehicle then there is an element of private use, so therefore should it not be payrolled as she is gaining a benefit on which tax and NI is due? If you cannot put the fuel through, which is doubtful, then you cannot claim the VAT back. She needs to look at a mileage claim. Or is this a company car?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi ya
Please do mention the van if I have missed something ....its company owned and solely used for work so have put through all fuel no scale charge
Re the car ....not company owned and used for business rarely maybe to get odd bit of stationary ...but I suspect that is combined with personal stuff ie not just gone into town to go to WH smiths for business!!!
Have been told it is wife car - but used by hubby for business when needed to go to jobs that didnt require materials hence more economical to use a car rather than the van
As it sounds like a recent thing, I would put all the unleaded fuel that's gone through to the director's account. Request that a business mileage log in the private car is kept (including historically) and for no more fuel to go through the business. He can then claim the authorised mileage rates from the company.
Hi Gail
I agree with Mike. Dump to his DLA and get him to claim mileage. No adjustments for VAT at all. Despite him saying he usedthe car for business there will also be a private element of travel using that same fuel and that is when it can get messy.
Van issue - not enough info Im afraid - Im assuming he doesnt have private mileage so than all would be well.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Problem is ... he doesnt have the option to reclaim mileage from anyone???
Position is unleaded fuel for private car has been paid for with business debit card so i have bank debits i need to post
I was thinking ..... if i set up a purchase ledger account call Expenses Unleaded Fuel and post the bank debits there i will currently show a credit balance
I have asked him for the mileage that he has done and was thinking when i get it i do an expenses sheet for that mileage and post it to said purchase ledger account and account for the element of vat can that can be claimed
If the account shows as a credit balance at year end i journal credit balance to the drawings account to clear purchase ledger account to zero (if it should show a debit amount amount i will say to take the difference out of the bank account and post accordingly to clear account to zero)
That way there is a clear separate account for the unleaded fuel
However im not sure what fuel rates to use? i dont know cc of private car at minute and the current advisory fuel rates 1st June 17 are either 11p/14p/21p...... BUT .... and here is why i dont know which to use the Open Govenment Licence says the rates only apply to employees using a company car ...... he is a director using a private car
The van is definately company owned and just used for business so for the diesel for that i have posted as per the fuel receipts and accounted for all vat.
I havent done a vat return for them yet as they have only just started so anything i have messed up on can be corrected before first return !!!!!
Im going to encourage him not to use the car!!!!!!!!!!!!!!!!!!!
With all respect, I think you may be over thinking it and the mileage rates you have quoted are for business mileage travelled in a company car. Here are the rates for business mileage travelled in your 'own' car which is your director's case: https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax
He claims the mileage from the limited co at 45ppm for the first 10,000 biz miles and 25ppm thereafter.
As Joanne says, dump the initial receipts to the DLA which can be adjusted once he puts in a mileage claim. He can carry on using the car and pay for fuel privately. There's some clever apps out there for tracking mileage also.
With all respect, I think you may be over thinking it and the mileage rates you have quoted are for business mileage travelled in a company car. Here are the rates for business mileage travelled in your 'own' car which is your director's case: https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax
He claims the mileage from the limited co at 45ppm for the first 10,000 biz miles and 25ppm thereafter.
As Joanne says, dump the initial receipts to the DLA which can be adjusted once he puts in a mileage claim. He can carry on using the car and pay for fuel privately. There's some clever apps out there for tracking mileage also.
Hope that helps...
Hi Gail
Once again agree with Mike. Just to slightly expand in case of need, fuel receipt you have- no vat reclaim, cr bank, dr DLA (not drawings as it's limited).
When you or him have worked out the mileage from his place of work to the stationery shop etc, cr DLA and dr travel expenses.
Job done.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
