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October Question and Answer Section

Newsletter issue - October 2012.

Q. I am employed by a charity that provides me with a Skoda Yeti car as my work involves transporting disabled people. I pay for all the petrol, but the charity reimburses me for work-related journeys at 15p per mile. This rate has not changed since June 2011, although the price of petrol has increased. Can I claim back any more of my petrol costs for work journeys from the Tax Office?

A. Unfortunately not. The advisory fuel rate for cars with petrol engines of up to 1400cc is 15p per mile and it hasn't changed since 1 June 2011. The rates for LPG cars and diesels have moved slightly over that period but not much. You could ask your employer to pay more per mile, but you will then be taxed on the excess above 15p per mile, unless you can show your car is particularly fuel-hungry, which is unlikely for a Skoda.

Q. I'm a painter and decorator, working mainly for individual householders. I only give out an invoice for work done if my customer asks for one. Is this acceptable to the Taxman? I'm not VAT registered.

A. As you are not VAT registered there is no legal requirement to issue invoices for every sale, but it is good business practice. If you accurately record the money you receive from customers, and those amounts can be tied up to the cash and cheques you bank, the Taxman should not have a problem with your business records. However, if the Taxman suspects that you have been under-recording your sales, because you receive many payments in cash which are not immediately banked, you may have a problem. We can help you set up a system which will accurately record your sales, and keep the Taxman happy.

Q. My office junior is paid exactly the national minimum wage (NMW). Do I have to put his wages up from 1 October 2012?

A. It depends how old your employee is. From 1 October 2012 the NMW rate for those aged 21 and over rises from £6.08 to £6.19 per hour, and the apprentice rate is increased to £2.65 per hour. However the rates for 16 to 20 year olds have not been increased.