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Vehicle Expenses

  • 19 posts
  • # 114302

I have new clients who previously used a large local accountant. These clients own a fish & chip shop/cafe by the way of a partnership.

The shop is 20 miles away from the clients home address. In my short period as a bookkeeper I believed you couldn't claim travel expenses to and from your place of work. But the accountants had been claiming motor expenses, had the clients car as an asset and claiming depreciation. (They owned the car previously to buying the business a number of years ago).

They pick up a member of staff close to their home and buy a few supplies at their local supermarket before they set off each day, would any of these reasons enable them to claim the motoring expenses? Or is my understanding completely wrong?

Any help or quidance would be appreciated.

  • Member
  • Practice Licence
  • 119 posts
  • # 114314

Hi

In short, you are correct when you say you can't claim travel/motor expenses for journeys between home and work. I've provided a couple of articles below, which you may find useful.

However, a number of points/questions:

1. I always treat Motor Vehicle Expenses (MVE) and Travel Expenses separately. The distinction being MVE are fuel, insurance, maintenance for the vehicle involved (or mileage); Travel Expenses are bus, train, taxi and parking.

2. It may be worth going back to the previous accountant and asking them how they arrived at the MVE. I assume the client passes all the receipts/bills for their motoring costs and the private/business proportions are calculated from details the client has provided about the mileage of their journeys.

3. Depreciation is not allowable, but there are capital allowances available for Motor Vehicles - again a private use element must be discounted.

4. Do you understand the difference between the Full Cost method and Mileage method of calculating MVE? From what you've said, I assume the Full Cost method is being used, but it may be as well to double check.

5. Referring to the journey in question, I would suggest firstly, you calculate the mileage for a direct journey from the clients home to the shop(A), and then calculate mileage for the trip that includes the stop off at the supermarket and the staff's home(B). Then I think there is an argument for saying the additonal mileage is allowable, i.e. B-A.

 

https://www.freeagent.com/guides/expenses/travel-and-accomodation/

http://www.rossmartin.co.uk/sme-tax-news/1795-home-office-to-work-travel-disallowed-again

  • 19 posts
  • # 114348

Many thanks for taking the time to respond. Very helpful and the articles also helped.

 

Neil.

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