Travel expenses for sole trader

X

xxx

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If a non vat registered sole trader gets paid travel expenses for some jobs how is this treated in accounts. At the moment they are treating all money received as sales and taking motor expenses of about €50 per week. What is the best way to deal with this. It does not happen for all jobs. Thanks
 
Re: Travel Expenses Sole Trader

I would consider the money received for expenses to be income and then you deduct, as expenses, the actual costs, fuel/ins/depreciation etc. incurred.
 
Re: Travel Expenses Sole Trader

and taking motor expenses of about €50 per week
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Any money received by a sole trader is taxable no matter what way he wants to dress it up. They can't just take an allowance for petrol. It is different for a limited company.

The 50 pw will have to be grossed up and included as wages and the relevant taxes paid on it.
 
Re: Travel Expenses Sole Trader

This is a very sweeping, and misleading, statement.

A sole trader IS entitled to include a deduction for business-related motor expenses when calculating taxable profits.

"Grossing-up" is totally irrelevant in this scenario as a sole trader is not subject to PAYE and as such does not receive a taxable "wage".
 
Re: Travel Expenses Sole Trader

I agree totally.
 
Re: Travel Expenses Sole Trader

Graham_07 said:
I would consider the money received for expenses to be income and then you deduct, as expenses, the actual costs, fuel/ins/depreciation etc. incurred.
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Which brings us back to the above, agreed ?
 
Re: Travel Expenses Sole Trader

Sorry about misleading statement but they can't just take out 50 pw tax free as the OP seems to be implying.

The rest of my statement is .....

What I should have said was that the 50 pw cannot be included in the calculation of the sole traders profit so therefore he will have to pay tax on it i.e it will have to be treated as drawings.

I agree with Graham 07, I was just trying to highlight (badly I admit) the fact that the 50 pw can't just be taken out of the business.
 
Re: Travel Expenses Sole Trader


Why not if it is a close approximation of the sole traders actual, receipted motor expenses?

Btw, the OP did say

xxx said:
... taking motor expenses of about €50 per week.
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When you find yourself in a hole, stop...
 


asdfg, the sole trader pays tax on the assessable profit for the year, taking revenue rules into account. Whether he takes out 50 or 5000 euro for "expenses" during the year is irrelevant, when all is said and done, as only the actual expenses occurred will be allowable against income in assessing those profits.
 
In the case of a ltd co (registered for vat midway through year) charging travel expenses at 0% vat on some invoices not all, what is the best way to go. Would you just leave those expenses in sales. Then would you just put in diesel etc in exp and claim vat, or would you just put in travel exp as they were charged on invoices (if so could you claim vat on motor exp).
 
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