First examine the facts as they exist in the current financial year 2007-08. The current approved mileage allowances were set five years ago in the financial year 2002-03 and while the current rates in no way reflect the increases in fuel costs in recent years that all businesses including small business. The Inland Revenue is actually considering a revised scale of tax allowances that may even lower the overall amount that can be claimed which will be detrimental to small business.
The approved mileage allowance for cars and vans is 40p per mile for the first 10,000 business miles and 25p per mile for each business mile over 10,000 miles in each tax year. The approved mileage allowance for motor cycles is 24p per mile for the first 10,000 business miles and 24p per mile for each business mile over 10,000 miles in each tax year. The approved mileage allowance for bicycles is 20p per mile for the first 10,000 business miles and 20p per mile for each business mile over 10,000 miles in each tax year.
Mileage allowances are not necessarily relevant to the business travel costs incurred. The purchase price of a new motor vehicle would not be unusually 100 times the price of a bicycle, plus vehicle maintenance costs, vehicle insurance, licence fees and substantial fuel charges in operating the motor vehicle compared with zero to https://decideursnews.com/ https://www.pressamedia.com/ https://canberratreeservice.com.au https://www.branchestreeservice.com.au/geelong https://www.goldcoastsnakecatching.com.au https://www.topbrokeri.com/ https://camround.com/ http://poradydlarodzicow.pl/ http://autoinspiracje.pl/ https://szczesliwemaluchy.pl/ https://swiatdzieciakow.pl/ https://jakieubranie.pl/ https://pojazdomania.pl/ https://modabeztajemnic.pl/ https://budowaniebeztajemnic.pl/ https://niewiedziales.pl/ https://fxsenya.com/costs for a bicycle. Few small businesses claim tax allowances for bicycle business journeys in their small business accounts.
Amazing that vehicle allowances are only double those claimabl;e if using a bicycle which has no running costs and can be purchased brand new for not much more than it costs for a single tank full of petrol. Not that many people are likely to use a bicycle and cover in excess of 10,000 business miles in a single tax year.
An additional 5p per business mile may also be claimed as a tax free expense if a fellow passenger is also carried on the business journey in the small business accounting records. That fellow passenger must also be on a work journey to enable the mileage allowance to be claimed in the small business accounts
Generally there are specific rules on justifying a business journey and the information that must be supplied to support the claim for a tax free mileage allowance. In practise the Inland Revenue often take a reasonable view of any claims provided the information provided in the small business accounts indicates that the claim is valid and has been incurred for real business journeys as opposed to an invention by the claimant.
The essential requirements when claiming is the travel date, reason for that journey, the location visited and the actual return mileage covered. Small businesses who claim this tax free allowance should maintain detailed records as part of the small business accounting to substantiate their expense claim should it later be challenged by the tax authority. Devising an expense sheet and submitting this sheet to the business is one way of ensuring sufficient documentation exists.
Check every sales and purchase transaction and record the mileage covered against each to maintain comprehensive accounting records of journeys substantiated by the sales invoice or supplier purchase invoice. With these transactions having already been recorded in the small business accounting records with a date, the location also stated on the invoice and the purpose of the journey being obvious the rules on supporting information are covered.