Showing articles in category Management.
Introduction
The basic options for recovering VAT on motoring expenses are:
a) claim all the VAT back on road fuel and pay the Motoring Scale Charge b) keep a detailed mileage record and calculate the proportion of VAT relating to business mileage c) pay a mileage allowance and keep the petrol receiptsor d) don’t claim back the VAT on road fuel.
If you reclaim VAT on road fuel for private motoring, HMRC will insist that you pay the Motoring Scale Charge. This charge is based on the CO2 emissions of the car and not the actual amount of private usage.
The scale charge must be added to the output tax (box 1), on the VAT return. If the business has a second or more cars and private fuel is provided, even with low mileage, there is a second or subsequent, scale charge. The only way around this is to have no fuel provided for private motoring for the second car.
If a company car driver repays the business, in full, for the fuel that they use for private motoring, then no scale charges are due, but VAT will be due on the payments received.
On the plus side the VAT on all road fuel, both business and private can be reclaimed, and the system is simple to use. On the down side you have to have quite high mileages for it to be financially worthwhile.
Keep Mileage Records
If you do not want to use the Motoring Scale Charge because the Scale Charge is more than the VAT on the road fuel, you can record all of your mileage in a mileage log showing the business mileage and the total mileage.
So if you have done 5,000 miles in the quarter and 1,000 are business miles, then you can recover 20% of the VAT. The system is accurate but complicated.
Pay a Mileage Allowance
If you do not want to pay the Scale Charge and the mileage log is too much of an administrative burden, then you can pay a mileage allowance and claim back the VAT on the element relating to road fuel.
The AA and RAC publish mileage rates that give the fuel costs per mile for the different engine sizes; these can also be obtained from the HMRC website. It normally works out at between 10 to 15 pence per mile depending on the engine size.
You then apply the VAT fraction to that figure and claim it back as input tax. You do need to have expenses forms to back up the claims and you will need to obtain petrol receipts to support the claim. Any purchases of less than £250, including VAT only, require a less detailed tax invoice.
The only other alternative is not to claim back the VAT on any road fuel at all !
Posted By Haydn Pyatt - 2010-06-01.Tags: Tax, Management
With effect from 6 April 2010 a new form for doctors to certify a persons fitness for work will be issued. It will add to the existing fit/unfit statement the following
If available, and with your employer’s agreement, you may benefit from:
a) a phased return to work
b) altered hours
c) amended duties
d) workplace adaptations
e) Comments, including functional effects of your condition(s):
This will enable employers to determine whether they can change an employee’s work pattern so that limited or certain duties can recommence.
Posted By Haydn Pyatt - 2010-03-10.Tags: Employment, Management
From 6 April 2009, Revenue and Customs have introduced an advisory system of benchmark scale rates which all employers can use to make subsistence payments free of tax and NIC to employees. This affects subsistence expenses incurred while travelling on an allowable business journey during the day only, when the following qualifying conditions are met:
- the travel is in the performance of an employee’s duties or to a temporary place of work;
- the employee is absent from his normal place of work or home for a continuous period in excess of either 5 or 10 hours; and
- the employee incurs a cost of a meal (i.e. food and drink) after starting the journey.
Employers wishing to use the benchmark system must notify Revenue and Customs by ticking the appropriate statement on form P11DX (¶4740) before starting to use the system.
The following rates apply:
Breakfast (irregular early starters only) The employee leaves home earlier than usual (before 6 am) and pays for breakfast – £5
One meal rate The employee has been away from his home/normal place of work for a period of at least 5 hours and pays for a meal – £5
Two meal rate The employee has been away from his home/normal place of work for a period of at least 10 hours and pays for meals – £10
Late evening meal rate (irregular late finishers only) The employee has to work later than usual (finishing after 8 pm) having worked his normal day, and has to buy a meal which he would usually have at home – £15
Note:
1. A limit of three meal rates in a 24 hour period applies.
2. Where employees are required to start early or finish late on a regular basis, the 5 or 10 hour rates could be paid provided all the other qualifying rules are satisfied.
3. If the employee is paid an allowance under the 5 or 10 hour rule, the late meal allowance could still be paid if work finishes after 8 pm and he buys a meal that he would usually have at home, unless he regularly finishes work late.
An employer may choose to pay higher rates, although any excess will be liable to tax and NIC unless a specific agreement is reached with Revenue and Customs, or the employer is merely reimbursing the actual cost incurred.
Incidental overnight expenses
The expenses which fall under this provision are those considered incidental to the individual’s stay away from his usual abode during a qualifying absence from home. For example, this might include telephone calls home, laundry or newspapers.
A qualifying absence from home is any continuous period during which the individual is obliged to stay away from home for at least one night.
Personal incidental expenses are not earnings providing they are below the de minimis limit of £5 per night in the UK and £10 per night outside the UK. Where the de minimis limit is exceeded, the whole amount (not just the excess) will become taxable.
Where the employee spends more than one consecutive night away, the total expense for the period is compared to the total of the de minimis amounts for the nights spent away. There is no requirement for each night to be looked at in isolation. Where the employer pays the expenses directly and the expenses for a number of employees are aggregated so that separate identification would be difficult, Revenue and Customs will accept a reasonable apportionment of the expenses.
Where the expenses of travelling to a particular place would not be deductible, this prohibits any claim for related accommodation expenses. For example, where a salesman makes a visit to relatives on the way to a client, the cost of travel from the office to the relatives’ house will not be deductible, and neither will the cost of hotel accommodation nearby.
Posted By Haydn Pyatt - 2009-11-17.Tags: Tax, Management
The European Court of Justice has held that where an employee is sick during a period of annual leave he will be entitled to take an equivalent period of annual leave after he is fit to return to work, and that, if necessary, this leave may be taken in a subsequent leave year.
Vicente Pereda (Free movement of persons) [2009] EUECJ C-277/08
As a result of this decision, the Working Time Regulations will require amendment to permit workers to carry forward annual leave in such circumstances.
Posted By Haydn Pyatt - 2009-09-23.Tags: Management
HM Revenue & Customs (HMRC) plans to phase out paper VAT Returns from April 2010. After that date, if your turnover is over £100,000 – or if you are newly VAT registered – you will have to submit your return online and pay VAT electronically.
For further information and proof that this is no joke visit the HMRC WebSite
Posted By Haydn Pyatt - 2009-09-16.Tags: Management, Tax
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