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Top tips for record-keeping on the road

Created: April 2019

1. If you’re using a car for business purposes, it’s important to keep a log of business miles. If this isn’t possible all the time, it’s a good idea to keep a record for a representative period of three or four typical months to make an overall calculation from.

It can sometimes be beneficial not to claim the 45p mileage allowance, particularly where car running costs are high.  In case this type of claim is more beneficial for you, it is a good idea to record the total mileage each year so that an appropriate business proportion can be calculated. Many people use the mileage allowance as it’s simpler and it is only possible to switch from this method to claiming actual costs when the car is changed.

  1. Keeping a diary can be useful, particularly when taxi receipts etc occasionally get lost. As well as a handy expenses record, a diary provides non-financial confirmation of business activities which can be useful in a tax investigation.
  2. It’s a good idea to keep a spreadsheet to help you record and analyse expenses under the headings that will appear in the business accounts. Excel is fine for this, or you can use accounting software such as QuickBooks Online or Xero which are tried and tested.
  3. Businesses often operate from separate sets of premises, including the homes of the proprietors. Home running costs can be claimed in these circumstances and a record should be kept of items such as mortgage interest, rent, council tax, buildings insurance, contents insurance, ground rent, light heat and power, repairs, decorating etc.
  4. Reasonable subsistence can be claimed while travelling. This usually includes snacks and light lunches/dinners, rather than restaurant meals. Claims can be made to include subsistence of work colleagues. Receipts or diary notes should always be retained.
  5. If you pay expenses by credit card, it’s useful to annotate credit card statements with a description of each expense. This is helpful when defending enquiries by HMRC, particularly where receipts have been lost or not retained. Personal bank statements can also be annotated. It’s important to be able to identify any incoming items that are not taxable. Private items, such as birthday gifts, will automatically be taxed by HMRC if discovered, and if they cannot be identified.

For more information on record keeping contact Barry Kernon on:

T: +44(0)20 7874 7875

E: bkernon@hwfisher.co.uk