Travel Expenses Included in contract payment.

[boles]

Hi All,

I have a quick question on how to process something in my self-assessment return.

I am self employed and, as part of my business, I have a monthly part time contract with a government agency. I am entitled to travel expenses at the rate of 28p per mile. Once per month I send an invoice for £1,000 (which is the value of my contract) plus the amount of miles I have covered. I then recieve one payment of, for example, £1,283 in my account.

How should I record the extra £283 or so that is being debited into my account? Is that taxable? What records do I need to keep to show the difference between the £1,000 contract and the £283 travel expenses? (My remmitance notice only says "Invoice for £1,283", it doesn't make any mention of travel expenses)


Many Thanks for your help!!


Andy.

[pawncob]

The money received is part of your Gross receipts.
From this you'll deduct the costs incurred in travelling (car/train etc) and all other expenses to arrive at the Net Profit on which you'll pay tax.

[boles]

Thanks for your help!!


I have another quick question regarding this...

When I started my business, I was advised through a Business Gateway course that I didn't need to keep receipts for every fuel purchase I made as I split my car between business and personal use. I was advised to keep a log of all the miles I travel and could put every mile through at a cost of 40p per mile.

Is this the case? Will a logbook of every journey distance, reason for journey and dates be sufficient records?


Many thanks again!

[pawncob]

If you're claiming at a fixed rate per mile, those records should be adequate.

[MrPAYE]

Re this "part-time contract" with the govt agency - are you sure this is self employment? The vast majority of Govt agencies get this wrong when engaging people like yourself.

Have a look at HMRC's website regarding employment status, there's plenty of stuff on there on this subject, and then come back on here if you're not sure.