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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4770
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I get very confused when it comes to mileage allowances / petrol

Customer Question

I get very confused when it comes to mileage allowances / petrol receipts. We run several partnerships, LLPs etc (one of which is VAT registered) and do a lot of travelling around for each business. I just want to know what the most efficient way to deal with motoring expenses. At the moment we just pay everything out of our own pocket as there isn't enough funds in the business to pay for it all at the moment. We are also looking to renew our car - Is it worth getting a lease car for the business as the majority of the miles are business miles? Or should we buy one and then claim mileage? The problem being how to claim mileage back if the company is not yet making a profit! We do try and log all of our miles and keep hold of as many fuel receipts as we can - but just don't know what we should be declaring/claiming etc??
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The simplest way to achieve this is to pay up to 45p per mile. This means that the only records which need to be kept are mileage records as the 45P per mile is a rough and ready twist of the spoon to stop the treacle running off so to speak and covers all capital and running costs. If the employer cannot pay as much as 45p per mile and uses a lower rate then the difference can be claimed on the individuals' self assessment tax return. If the organisation cannot pay through shortage of funds it can still be posted as a creditor and repaid when the financial situation improves. I do hope that my reply as been of assistance.