Mileage Claim On Self Assessment - Directors

[T5R+]

Confused myself (easily done ).

If a company director clocks up 18,000miles per annum using his/her own car whilst billing the client(s) at 45p/mile...........does the director have to put this "income" on their tax return?

If so, assume the tax man would want a share of the "profit" generated from 8,000 miles invoiced at 45p (as anything above 10,000miles is advised at 25p/mile).

[jammy_basturd]

I'm far from an expert, but the if you've billed it to the client then the income is that of your companys not yours. There is no profit - the mileage allowance pays for petrol along with general wear and tear on the vehicle.

[Eric Mc]

T5R+ said:

Confused myself (easily done ).

If a company director clocks up 18,000miles per annum using his/her own car whilst billing the client(s) at 45p/mile...........does the director have to put this "income" on their tax return?

If so, assume the tax man would want a share of the "profit" generated from 8,000 miles invoiced at 45p (as anything above 10,000miles is advised at 25p/mile).

Simple answer - yes, mileage claims billed to a customer are part of the business' normal "sales" income. Therefore, the total sales figure shown in the business accounts will be the FULL VALUE of sales which will include any separate mileage amounts or any other expense claims that are recovered through the sales invoices the business has generated during the year.

However, you mention the word "director" which indicates to me that your business is being run through a limited company. If the business you run IS a limited company, then these mileage amounts the business is recovering from your customers form part of the COMPANY'S sales income, and are nothing to do with you personally. They will be incorporated in the overall limited company set of accounts and will go towards generating the profit of the limited company which will be subject to CORPORATION TAX and not Income Tax.

As far as you personal self assessment tax return is concerned, the mileage amounts you have shown on the company sales invoices are totally ignored.

HOWEVER, I presume as a director of the limited company you will, from time to time, want to reimburse yourself personally from the company for any company costs you may have paid out of your own personal resources. These may include mileage claims. As long as the mileage YOU claim from YOUR OWN COMPANY are below the maximum limits set by HMRC. You NEED NOT declare these PERSONAL mileage claims on your personal Self Assessment tax return.

The current allowed mileage rates are 45p per mile for the first 10,000 miles and 25p for mileage above 10,000.

Do you have an accountant? The nature of your initial question indicates to me that you may not. If you don't, you need one desperately urgently.