Record approved mileage allowance payments (private car)

Summary

How to record approved mileage allowance payments in Sage Accounting.

Description

This explains how to record mileage expenses when reimbursing an employee for business use of their own car.

This also known as the approved mileage allowance payment rates or AMAPs.

How you record the mileage expenses will vary depending on whether you're VAT registered. We have already created a ledger account for Vehicle Fuel. Use this to record your mileage expenses or create a new ledger account if you want to track this separately.

Resolution

Example:

John Smith uses his own car for business and has driven one 1000 miles this month. The company agreed to pay him 45 cents per mile, so the company owes John €450.

Create a ledger account for mileage

If you want to track your mileage expenses separately from other fuel payments, create a new ledger account with the following details

Name Nominal code Category VAT rate
Mileage 7302 Overheads No VAT

  1. From Settings, choose Business Settings.
  2. Select Chart of Accounts, then New Ledger Account.

  3. Enter the details and Save.

Record mileage - not VAT registered

When paying mileage expenses from your bank account, record them using the new Mileage ledger account.

There are two ways you can do this.

  1. Create a new payment from your bank feed or bank statement import.
  2. Manually enter as an Other Payment.

Using bank feeds or importing your bank statement

When you process your imported bank transactions

  1. Select the Mileage ledger account from the What dropdown list.
  2. Select Create.

Manually create a bank payment

Use this when you don't have a bank feed and don't import your bank statement.

  1. From the Banking tab, choose New, then Purchase / Payment and Other Payment.
  2. Enter the details such as the date, total amount paid and a relevant reference.
  3. Select the Mileage ledger account.
  4. Select Save.

Record mileage - VAT registered

The fuel component of mileage expenses is subject to VAT. The rate per mile for calculating the fuel component depends on the engine size. Refer to the Revenue for guidance.

When you record the mileage expense repayments, select the new Mileage ledger account. Then split the expense into two lines, one for the fuel component, which is vatable and one for the remainder.

There are two ways you can do this.

  1. Create a new payment from your bank feed or bank statement import.
  2. Enter a manual bank payment if you're not using bank feeds or importing from a bank statement.

In our example, John has driven 1000 miles. You pay John €0.45 per mile. His total mileage claim is €450.

The rate per mile for the fuel component is €0.15.

For John's 1000 miles, the fuel component is €150, which is inclusive of VAT.

Using bank feeds or importing your bank statement

When you process your imported bank transactions

  1. Select the split icon.

  2. On the first line:

    • Select the new Mileage ledger account from the What dropdown list

    • Select the Standard VAT rate

    • Enter the amount of the fuel component. In our example €150

  3. On the second line:

    • Select the new Mileage ledger account from the What dropdown list

    • Select No VAT

    • Enter the remaining amount. In our example €300

  4. Select Create.

Create bank payment

Use this when you don't have a bank feed and don't import your bank.

  1. From the Banking tab, choose New, then Purchase / Payment and Other Payment.
  2. Enter the details such as the date, total amount paid and a relevant reference.

  3. On the first line,

    • Select the Mileage ledger account

    • Select the standard VAT rate

    • Enter the amount of the fuel component. In our example €150

  4. On the second line,

    • Select the new Mileage ledger account

    • Select No VAT

    • Enter the remaining amount. In our example €300

  5. Select Save.



Solution Properties

Solution ID
222001000100722
Last Modified Date
Thu May 30 10:59:09 UTC 2024
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