If rather than charge for the pertol in my car I am just putting an entry through @ 40p a mile for petrol how do I account for this in the books.
I was going to Debit (car expenses) & Credit the bank but this will cause me problems when reconcilling the bank account. As an example I would have put £10 in the car in petrol for my own personal use from my own personal account. But used £5.00 of this for business. So there will be no receipt for the £5.00 I used for business.
So could someone give me a clue how I go about the entries please
There's many ways. Personally I set myself up as a cash account and make payments from myself in the same way as a bank payment. Then at the end of the month I make a bank transfer from bank to me and transfer the cash from the bank to my personal account.
The actual amount your spending on petrol is completely separate to your mileage claim... so regardless of the amount you actually spend on fuel and what for, you can't go to wrong as the others suggested - just recording the business miles and the 40p rate (or 25p for over 10,000 miles in the year).
You don't need actual receipts for this (but do for VAT), it is the mileage log you require as evidence.
A couple of things to also bear in mind...
The mileage claim (40p) includes wear and tear and other motor vehicle costs (servicing, tyres, insurance etc).
If you are reclaiming VAT, you need to keep receipts that show at least the amount of VAT you are reclaiming. (fuel rates for reclaiming VAT)
Hope that helps too!
-- Edited by AccountantsCircle at 07:13, 2008-11-04
Just read your post regarding mileage expenses. I've only ever claimed mileage expenses for a couple of clients niether of whom are VAT registered. However, I didn't realise that the VAT portion of the mileage expenses could be reclaimed, is it as simple as referring to the HMRC fuel rates (as per your link) and extracting the VAT portion (7/47)? Or can the VAT portion of servicing/maint etc also be claimed?
