Personal Pensions
If the pension is a personal pension plan (not in the name of your business) then this should not be recorded as a business expense. This is a personal tax issue and is not related to your business.
You will need to provide details of pension payments in your personal tax return.
Business Pensions
If the pension plan belongs to the company then it should be recorded as a business cost. You should ensure the pension payments come from your business account and not your personal account.
Please seek further advice from us if your business does have a pension and we can then account for it correctly.
CIS - Construction Industry Scheme
Does CIS apply to you?
Your client will let you know if the work you are doing for them is classed as "CIS". If so, your client is obliged to make a tax deduction from the amount due on your invoice.
You must register your business on the CIS scheme if you are subject to CIS deductions. This will reduce the amount deducted from 30% to 20%.
What happens to the CIS deductions?
These deductions are not an additional tax. They are basically an advance payment of any PAYE tax that is due by your business. If the CIS deductions are bigger than your company's PAYE tax bill then Tempo will help you get these deductions offset against your Corporation Tax bill instead.
Marking your invoice as part paid.
When you receive funds from your client it will not cover the full invoice amount because of the CIS deduction. Please only record the actual amount paid into your bank account against the invoice.
Tempo will then mark the remaining amount as a CIS deduction so that the invoice is not marked as "Outstanding" or "Payment Due".
Please contact Tempo for help on this.
Receiving a CIS statement from your client.
Your client is legally obliged to send you a CIS statement covering every CIS deduction they make.
Please ensure that your client sends you this statement and forward a copy onto your Tempo support team. We can then ensure we are recording the deductions correctly.
Your client will let you know if the work you are doing for them is classed as "CIS". If so, your client is obliged to make a tax deduction from the amount due on your invoice.
You must register your business on the CIS scheme if you are subject to CIS deductions. This will reduce the amount deducted from 30% to 20%.
What happens to the CIS deductions?
These deductions are not an additional tax. They are basically an advance payment of any PAYE tax that is due by your business. If the CIS deductions are bigger than your company's PAYE tax bill then Tempo will help you get these deductions offset against your Corporation Tax bill instead.
Marking your invoice as part paid.
When you receive funds from your client it will not cover the full invoice amount because of the CIS deduction. Please only record the actual amount paid into your bank account against the invoice.
Tempo will then mark the remaining amount as a CIS deduction so that the invoice is not marked as "Outstanding" or "Payment Due".
Please contact Tempo for help on this.
Receiving a CIS statement from your client.
Your client is legally obliged to send you a CIS statement covering every CIS deduction they make.
Please ensure that your client sends you this statement and forward a copy onto your Tempo support team. We can then ensure we are recording the deductions correctly.
What types of expense should my business record?
If you are new to running a business then you my find our overview of expenses useful.
Please click here to view the PDF document.
Please click here to view the PDF document.
My payroll has just run - should I now pay myself the Net amount?
Tempo will run your PAYE payroll once per month and automatically create a payslip for you. However this does not necessarily dictate the amount you should pay yourself.
Usually a director will pay themselves more than the Net amount on the payslip as each payment will usually comprise of three elements:
It is not necessary to calculate the above on a monthly basis as Tempo will keep track of what each payment is covered by in the background.
So how much should I pay yourself?
We advise leaving enough funds in the bank account to cover any taxes your company may owe. After this, any additional amount you leave in the company is down to the Director's preference.
Please see this section for further advice.
Usually a director will pay themselves more than the Net amount on the payslip as each payment will usually comprise of three elements:
- PAYE salary (the Net amount on the payslip)
- Expense reimbursement (any amounts owed to the director by the company for expenses)
- Dividend payment (what ever is left will later be marked as a dividend payment)
It is not necessary to calculate the above on a monthly basis as Tempo will keep track of what each payment is covered by in the background.
So how much should I pay yourself?
We advise leaving enough funds in the bank account to cover any taxes your company may owe. After this, any additional amount you leave in the company is down to the Director's preference.
Please see this section for further advice.
Claiming car MOTs, services and repairs as an expense
Generally these are not valid business expenses.
A business can only claim the vehicle servicing and repairs when the business owns the vehicle. If the vehicle is actually owned by a director or employee then this is not an allowable expense claim.
The mileage rate (an amount claimed per business mile driven) is designed to cover any wear and tear on the vehicle in addition to the actual fuel used.
If the vehicle is a hire car then repairs and servicing can often be claimed. Please seek assistance first.
A business can only claim the vehicle servicing and repairs when the business owns the vehicle. If the vehicle is actually owned by a director or employee then this is not an allowable expense claim.
The mileage rate (an amount claimed per business mile driven) is designed to cover any wear and tear on the vehicle in addition to the actual fuel used.
If the vehicle is a hire car then repairs and servicing can often be claimed. Please seek assistance first.
Should I add VAT onto my sales invoice?
If you have instructed Tempo to register your company for VAT then the website will automatically add VAT onto your sales invoices when you create the invoice.
If your invoice is raised before your VAT registration date then no VAT is added.
If your invoice is raised before your VAT registration date then no VAT is added.
Can I customise my invoice with a company logo?
Yes - email us a copy of your business logo (on a white background) and it will then appear on the top of your invoices.
How do I pay Tempo’s monthly fee?
We will contact you and advise how to set up a monthly standing order from your business bank account. Tempo will automatically add the purchase as a business expense and mark it as paid as required.
Do I need to send a copy of my business bank statement to Tempo?
Please periodically (approximately once a month) email a copy of your recent business bank statement to the support team. We will then make sure your system bank account matches your real bank account. You can either cut and paste the transactions from your Internet Banking in to an email; attach a CSV download; or email a scanned copy of the printed statement.
Soon you will be able to upload your business bank statements directly into Tempo.
Should my business bank account balance match the shown balance on Tempo?
Yes. Tempo has an accurate view of your business as long as every transaction on your business account is reflected in Tempo. All transactions on your real business bank account must be recorded on Tempo.
For example:
- Record all payments from your clients by marking invoices as paid in Tempo.
- Record all transfers to yourself using the “Director payment” link on the dashboard.
- If you purchase something using the business account then make sure you record it in Tempo (see below).
- Record all Tax payments that you make using the links from the schedule.
- Record internal bank account transfers (e.g form business current account to business savings account) using the “Transfers” link in the “Bank Accounts” menu in Tempo.
- Record all other transactions including interest received, banking fees etc. Request assistance from Tempo if you are not sure how.
How do I know if Tempo’s statement matches my real bank statement?
You should regularly ensure that the Tempo’s version of your business bank statement does match your real bank account statement. View Tempo’s statement by selecting “Accounts” from the main menu and compare this to your Internet banking statement. If the balance on any particular day is not the same then something is incorrect. Regularly (approximately once a month) send a copy of your real statement to Tempo for checking.
I’ve paid for something using my business bank account - how do I record this on Tempo?
When adding an expense or marking a purchase invoice as paid you will be asked to select “The account used for this purchase”. If your business account was used (e.g. using your business debit card or a transfer from you business account using Internet Banking) then make sure you select “Business Current”. If you used your personal account (not the business) then select your name form the list.
I have a business Credit Card / Business Savings account - do I need to tell Tempo?
Yes - we can help you add the credit card to Tempo so that transactions can be recorded correctly.
When can I send my first invoice using Tempo?
If your company has been incorporated and you have been assigned sign-in details for Tempo then you are ready to start invoicing your client(s).
You may prefer to wait until your company bank account has been opened and set up on Tempo, as these payment details will then appear on your sales invoice.
You do not need to wait for the VAT registration and Tempo will automatically add VAT onto your sales invoice if required.
How do I know if my client has paid my invoice?
Your client will most likely pay directly into your business bank account. Using you bank’s Internet Banking service is often the best way to check for payments into the account. If you receive funds, don’t forget to mark your invoice as paid in Tempo! See below.
What do I need to do when my client has paid an invoice?
When you receive funds from your client it is very important to update Tempo. Sign in to Tempo and find the relevant sales invoice - then follow the clear links to mark it as paid. Make sure the date and the amount you provide reflects your bank statement accurately.
Now that my client has paid my invoice - how do I pay myself?
If you need to take funds out of your business account:
- Make sure you leave enough in the business account for tax purposes (see below).
- Use your bank’s Internet Banking facility to move funds to your personal account.
- Make sure you record the transfer on Tempo (see the link on the dashboard - “Record Payment to Director”)
How much of my invoice amount should I leave in my company account to cover Tax?
This varies according to your business and Tempo can give specific advice for your business. As a general rule of thumb the following applies:
- Leave all of the VAT amount in the business account, as much of this will be needed to pay your VAT bill later.
- In addition, leave at least 20% of the Net invoice amount (Net does not include VAT) to cover tax bills due later.
Also, if you make other regular payments from your business account (e.g. for suppliers or employees) you will need to make sure there is also enough cash available for this.
Simple example:
You send an invoice to your client for £1,000 + VAT and your client pays the full amount (£1,200 including the VAT). We’d suggest leaving the full £200 VAT amount in your business account. We would also suggest leaving 20% of the Net in the business account (0.2 X £1000 = £200). The remaining 80% is available for your personal payment - in this case (0.8 X £1000 = £800). Following this rule you’d take £800 and leave £400.
When do I declare Dividends?
Tempo will periodically (once a quarter) confirm how much you’ve taken out of the company. Whatever isn’t set aside as Salary or Expenses will be declared as a Dividend. You will be informed if there is any paper work to complete. This is not something you need to consider on a more regular basis unless you specifically request it.
Can I claim the fuel that I use for business travel?
Instead of claiming the actual fuel costs (when you fill up) you can claim a ‘per mile’ rate. If the car you drive for business is your own vehicle (not owned by the company and not a hire car) then you should claim a rate per mile driven rather than the actual petrol costs. Please see here for guidance on how to claim your business mileage.
Recording payments from your company to your personal account
When to pay yourself
Please get in contact to discuss a suitable Director's payment plan which works for your business. We won't go into more detail in this post but please read on to find out how to let Tempo know each time you've made a Director's payment.
Recording the Payment in Tempo
Each time you take funds out of your company for yourself you must record this transaction in Tempo. From the dashboard there is a Quick Link to "Record Payment to Director". Alternatively use the Menu and select "New Payment" in the "Directors" section.
Click "Save" and that's all you need to do. It's very important that Tempo knows about these payments so that we can advise appropriately and complete the required paperwork for you.
Please get in contact to discuss a suitable Director's payment plan which works for your business. We won't go into more detail in this post but please read on to find out how to let Tempo know each time you've made a Director's payment.
Recording the Payment in Tempo
Each time you take funds out of your company for yourself you must record this transaction in Tempo. From the dashboard there is a Quick Link to "Record Payment to Director". Alternatively use the Menu and select "New Payment" in the "Directors" section.
- Select the Director receiving the payment
- Enter the amount transferred
- Give the Date that the funds left your company account
- Select which business bank account the payment was made from
Click "Save" and that's all you need to do. It's very important that Tempo knows about these payments so that we can advise appropriately and complete the required paperwork for you.
What to do when a client pays your sales invoice
When you see on your business bank statement that funds have arrived from your client, you must record this transaction in Tempo.
Simply go to the Sales Invoice that the money is for and follow the link to "Record a Payment".
Step by step instructions are:
Step 1. Check your bank statement (i.e. internet banking) to see if funds have been paid into the account.
Step 2. Find the Sales Invoice that the payment corresponds to. One way to search for invoices is from the "Menu", click "View Sales". If the invoice is not in the list then change the date range or filter options. Select the invoice and view it's details.
Step 3. If the invoice has not already been fully paid you will see an option to "Record a Payment". Click this.
Step 4. Complete the 'Record Funds Received Form" in the following way.
Simply go to the Sales Invoice that the money is for and follow the link to "Record a Payment".
Step by step instructions are:
Step 1. Check your bank statement (i.e. internet banking) to see if funds have been paid into the account.
Step 2. Find the Sales Invoice that the payment corresponds to. One way to search for invoices is from the "Menu", click "View Sales". If the invoice is not in the list then change the date range or filter options. Select the invoice and view it's details.
Step 3. If the invoice has not already been fully paid you will see an option to "Record a Payment". Click this.
Step 4. Complete the 'Record Funds Received Form" in the following way.
- Amount Received - enter the amount of the payment that is to be assigned to this invoice.
- Date Received - make sure this is the same date as the payment on your bank statement.
- Which Account - Select the bank account that the transaction came into (usually Business Current).
Step 5. Click save and that's it! If you have received a payment for another invoice then do the same again.
Becoming VAT Registered
If your business mainly invoices other businesses who are registered for VAT then it may well be beneficial to become VAT registered. You can then save any VAT you are paying on purchases (including Tempo's fees). If your turnover hit's £73K (2011 threshold) then you must register for VAT.
How does my business become VAT registered?
Tempo can handle the application process for you but we may need to find out a little more about your business first via a short questionnaire (including predictions of turnover etc). Unfortunately the actual application can take HMRC several weeks to complete.
How do I file my VAT returns?
Tempo can take care of this for you! However, it is important to make sure that sales, purchase and banking details on your Tempo account are kept up to date so that the VAT return is accurate. We ask you to confirm this online before filing the return on your behalf each quarter.
How do I pay my VAT bill?
Tempo makes this really easy by telling you exactly when, how much and where to pay any VAT due at the end of each quarter. It also appears as an event in your "company schedule" in Tempo, so that you know if a deadline is coming up. (We email reminders too...so you can't forget!) . The only thing you have to do is send the actual payment to HMRC using your internet banking and then click a link in Tempo to let us know you've made payment.
Can I use the flat rate VAT scheme?
Yes - we can advise on whether this looks like a better option for your business.
Tempo can handle cash based VAT accounting and the Flat Rate Scheme with ease.
For further advise on becoming VAT registered please feel free to get in contact with the Tempo support team!
Dealing with HMRC's "New Company" forms
Soon after your company is formed you will receive an important form from HMRC - a CT41G ("New Company Details"). It is important that these are dealt with asap.
Simply sign the form, as described below, and forward it onto Tempo (see address). We will complete the remaining details and return the form to HMRC on your behalf.
Where to sign the New Company Details form? Sign at the bottom of the second page.
Need help selecting the right category for your purchase?
When adding company purchase / expense to Tempo you must select an appropriate category for the item.
You can search the list by simply typing key word such as 'food' or 'stationary' into the 'Code' box.
If you can't see a category that applies to your purchase simply select 'Unknown' (the top item). This will automatically inform our support team who will code the item for you! We will also email you for future reference.
You can search the list by simply typing key word such as 'food' or 'stationary' into the 'Code' box.
If you can't see a category that applies to your purchase simply select 'Unknown' (the top item). This will automatically inform our support team who will code the item for you! We will also email you for future reference.
Employer's NIC Holiday Incentive
HMRC have extended their Employer's NIC holiday to all companies formed between 22 June 2010 and 5 September 2013.
The NIC holiday is one way the government are trying to encourage businesses to take on new employees.
Employers under the scheme can save up to £5000 per employee for the first 10 employees hired.
Tempo has informed relevant companies using our service but if you'd like more information please get in touch.
The NIC holiday is one way the government are trying to encourage businesses to take on new employees.
Employers under the scheme can save up to £5000 per employee for the first 10 employees hired.
Tempo has informed relevant companies using our service but if you'd like more information please get in touch.
Setting Up a Bank Account
Your business will need a dedicated business bank account for your main trading activity.
You can choose who to bank with, however if you've not yet got a business account we'd suggest using HSBC for these reasons:
You can choose who to bank with, however if you've not yet got a business account we'd suggest using HSBC for these reasons:
- We work directly with HSBC to get your account opened very quickly.
- No forms to fill out (you just have to sign them when they arrive in the post).
- You banking transactions can be download directly from HSBC into Tempo (automatically).
- It's free! Totally free for 18 months and after this you only get small fees for cashing cheques etc. A;; electronic payment stay free.
- Contact Tempo to let us know you'd like to open a HSBC account for your business.
- We'll provide all the required account opening details directly to our contact at HSBC.
- You'll receive a call from our contact at HSBC who will talk you through the new account.
- The already completed forms will be posted to you for you to sign where marked.
- Drop the signed forms into any HSBC brand along with your passport (or driving licence) and a utility bill with your address.
- The next day your account details will be issued!
Can I keep scanned copies of my receipts instead of the originals?
It's important to keep business records such as invoices, receipts and bank statement for at least 6 years. However, HRMC now accept scanned / electronic copies of these documents as long as they "represent a complete and unaltered copy of the underlying paper document." Source HMRC
If you choose to only keep scanned copies please bare in mind that you need a suitable method to store them such that they are not lost in the event of a computer 'mishap'! Think stolen laptop or damaged hard-drive...
One solution is to use an on-line storage facility such as DropBox with 2GB of free storage space.
Finally, Tempo is building the facility for you to store scanned expense receipts within our on-line system... that's all we can say for now but watch this space.
If you choose to only keep scanned copies please bare in mind that you need a suitable method to store them such that they are not lost in the event of a computer 'mishap'! Think stolen laptop or damaged hard-drive...
One solution is to use an on-line storage facility such as DropBox with 2GB of free storage space.
Finally, Tempo is building the facility for you to store scanned expense receipts within our on-line system... that's all we can say for now but watch this space.
Insurance for your Business
Depending on the nature of your business you will need a combination of the following insurance:
Professional Indemnity Insurance
Most businesses should have this cover. This provides cover for claims bought against your business for professional negligence. For small businesses this should cost little more than £100 per year.
Liability Insurance
If your business causes injury to a person or property you may be sued. Liability cover can protect your business against associated legal and settlement costs.
Employer's Liability
This cover provides protection from claims made by employees so it is essential if you decide to take on a workforce of any size.
General Business Insurance
If your business owns equipment, deals in cash or has property then you should consider obtaining insurance against loss and damage.
Other Insurance
There are other types of insurance worth considering, for example Key Persons Cover (to insure against the loss of a vital member of your business). Business link provides plenty of useful information on their website.
Please let us know if you would like us to arrange contact from one of our preferred suppliers as we may be able to arrange a good rate for you.
Professional Indemnity Insurance
Most businesses should have this cover. This provides cover for claims bought against your business for professional negligence. For small businesses this should cost little more than £100 per year.
Liability Insurance
If your business causes injury to a person or property you may be sued. Liability cover can protect your business against associated legal and settlement costs.
Employer's Liability
This cover provides protection from claims made by employees so it is essential if you decide to take on a workforce of any size.
General Business Insurance
If your business owns equipment, deals in cash or has property then you should consider obtaining insurance against loss and damage.
Other Insurance
There are other types of insurance worth considering, for example Key Persons Cover (to insure against the loss of a vital member of your business). Business link provides plenty of useful information on their website.
Please let us know if you would like us to arrange contact from one of our preferred suppliers as we may be able to arrange a good rate for you.
Director's Payment Policy
We suggest that you decide on a strategy for paying yourself as a Director early on in your business' life.
Following simple guidelines will ensure that you don't have any unwelcome surprises when HMRC decides to audit your company.
The areas to consider are:
Monthly PAYE Salary
Decide how much PAYE salary to take from the company each year. Depending on profits we would suggest a minimum of £12K per year - assuming you are working full time on the business and have no other employment. This makes use of a tax free allowance; is above minimum wage and keeps your NI contributions topped up. Tempo automatically runs payroll for you once we have set your salary levels.
Dividend Policy
Ideally you would declare a dividend every quarter (based on profits). This is a very non-contentious approach and is inline with how most sizeable businesses operate. If you declare dividends very frequently (or extract profits without declaring a dividend) then you are at risk of having this income treated as a salary. Tempo can help you declare and record dividend payments officially.
Expenses Reimbursment
If you are personally incurring expenses on behalf of the company (e.g. using your own vehicle for travel or paying for company items from your own account) then the company should pay you back on a regular basis. We'd suggest paying this on the same day as your salary payment once a month. Tempo easily shows how much the company owes you at any point in time.
Please get in touch if you would like to discuss any of the above, or make changes to your automatic salary.
Following simple guidelines will ensure that you don't have any unwelcome surprises when HMRC decides to audit your company.
The areas to consider are:
Monthly PAYE Salary
Decide how much PAYE salary to take from the company each year. Depending on profits we would suggest a minimum of £12K per year - assuming you are working full time on the business and have no other employment. This makes use of a tax free allowance; is above minimum wage and keeps your NI contributions topped up. Tempo automatically runs payroll for you once we have set your salary levels.
Dividend Policy
Ideally you would declare a dividend every quarter (based on profits). This is a very non-contentious approach and is inline with how most sizeable businesses operate. If you declare dividends very frequently (or extract profits without declaring a dividend) then you are at risk of having this income treated as a salary. Tempo can help you declare and record dividend payments officially.
Expenses Reimbursment
If you are personally incurring expenses on behalf of the company (e.g. using your own vehicle for travel or paying for company items from your own account) then the company should pay you back on a regular basis. We'd suggest paying this on the same day as your salary payment once a month. Tempo easily shows how much the company owes you at any point in time.
Please get in touch if you would like to discuss any of the above, or make changes to your automatic salary.
Considering IR35
Tempo's service is geared towards businesses that are not effected by the IR35 legislation.
It is important that you let us know if you believe that your company may be operating inside the IR35 legislation so that we can explain your options. If you have any concerns please seek specialist advise. Such advise can be given by QDOS.
HMRC also has it's own Employment Status checker.
It is important that you let us know if you believe that your company may be operating inside the IR35 legislation so that we can explain your options. If you have any concerns please seek specialist advise. Such advise can be given by QDOS.
HMRC also has it's own Employment Status checker.
Dividend Tax Credits Explained
Dividend Tax Credits
For those that are interested, here is an explanation of what a Dividend Tax Credit is and how this is used to calculate the tax owed on Dividends received.
If a company pays out a Dividend to a share holder of say £1000 - this is known as a Net Dividend. HMRC then adds a "tax credit" onto this to calculate the Gross Dividend. The Net Dividend is always 90% of the Gross Dividend, so to calculate Gross from Net you divide Net by 0.9. (£1000 / 0.9) = £1111.11.
HMRC then writes off 10% of the tax due on the Gross Dividend (this is because the company has already paid corporation tax on its profits). In this case 10% of £1111.11 is £111.11. So this amount of tax has effectively already been paid.
Let's say the shareholder's gross taxable income for the year is already over the £35,000 threshold - this means that they must pay 32.5% of the Gross dividend as tax. 32.5% of £1111.11 is £361.11, however we can deduct from this the £111.11 Tax already accounted for: £361.11 - £111.11 = £250. So a total tax of £250 must be paid on the initial Net dividend of £1000. This works out nicely as 25% of the Net Dividend.
This link on HMRC's website provides further information.
For those that are interested, here is an explanation of what a Dividend Tax Credit is and how this is used to calculate the tax owed on Dividends received.
If a company pays out a Dividend to a share holder of say £1000 - this is known as a Net Dividend. HMRC then adds a "tax credit" onto this to calculate the Gross Dividend. The Net Dividend is always 90% of the Gross Dividend, so to calculate Gross from Net you divide Net by 0.9. (£1000 / 0.9) = £1111.11.
HMRC then writes off 10% of the tax due on the Gross Dividend (this is because the company has already paid corporation tax on its profits). In this case 10% of £1111.11 is £111.11. So this amount of tax has effectively already been paid.
Let's say the shareholder's gross taxable income for the year is already over the £35,000 threshold - this means that they must pay 32.5% of the Gross dividend as tax. 32.5% of £1111.11 is £361.11, however we can deduct from this the £111.11 Tax already accounted for: £361.11 - £111.11 = £250. So a total tax of £250 must be paid on the initial Net dividend of £1000. This works out nicely as 25% of the Net Dividend.
This link on HMRC's website provides further information.
Dividends and Personal Tax
Figures below are for the tax year 6 April 2011- 5 April 2012.
If you are a Director and Shareholder of a limited company some of your take-home pay will be PAYE Salary and some will be Dividend income. The tax for the Salary portion of your income is paid by the company before you receive it so there's no need to provision for any additional tax due on your tax return. However you may need to provision for additional personal tax due to the Dividends you receive - but only if your total gross income for the tax year is above £42,475*.
If your total gross income** is £42,475 or less
You are not a higher rate tax payer and there is no additional tax to pay on any Dividends you receive.
If your total gross income is between £42,475 and £157,475
You are a higher rate tax payer and you should prepare to pay some additional income tax. Any proportion of Dividend received which takes you over this threshold will be taxed at a rate of 25% of the Net Dividend.
Please note that for the Tax Year 2010/2011 the threshold was £43,875.
HMRC's website provides further information.
Notes
* £42,475 is calculated by adding the tax free allowance of £7,475 to the higher rate threshold of £35,000
** Don't forget that to calculate your Gross Income you should include the Gross Dividend - this is calculated by taking the actual Dividend amount received (Net Dividend) and dividing by 0.9. E.g. £900 Net Dividend received is a Gross Dividend of £1000. Details here.
Claiming Mileage as a Company Expense
Can I claim mileage as an expense if I'm using my own car?
If you travel for your business using your own vehicle you can claim the mileage as a company expense.
It's generally acceptable to claim 45p per mile for the first 10K miles in one tax year, after this the rate claimed should be 25p per mile.
This rate should cover the cost of fuel and any wear and tear on the vehicle. You should not claim the actual fuel costs (i.e. when you fill the car up) or service, MOT costs unless you are using a hire car.
How do I record the expense?
Mileage claims can be recorded in the same way as all other expenses.
Click the screen shot below for an example:
If you travel for your business using your own vehicle you can claim the mileage as a company expense.
It's generally acceptable to claim 45p per mile for the first 10K miles in one tax year, after this the rate claimed should be 25p per mile.
This rate should cover the cost of fuel and any wear and tear on the vehicle. You should not claim the actual fuel costs (i.e. when you fill the car up) or service, MOT costs unless you are using a hire car.
How do I record the expense?
Mileage claims can be recorded in the same way as all other expenses.
- From the Main Menu select "New Expense".
- Select your name and provide the date of travel.
- In the Item field you should provide enough information to explain where, why the claim is made. For example "Meeting in Woking with ABC. Return BS1 to GU21 3RG. 200M @45p".
- Add the amount (in this case 200 X 0.45 = £90)
- Select "No VAT".
- Select "495 - Travel - Personal Mileage" as the code
- Save the expense and authorise as normal.
Click the screen shot below for an example:
How do I change my password?
To change you password simply log into Tempo using your current password,
- Click "Account" in the top right of the screen
- Click "change password"
- Enter your new password into both boxes
- Click "Save"
What's the difference between a Purchase Invoice and Expense?
If you've received an invoice from a supplier then we'd suggest adding a new Purchase Invoice. If you've bought something smaller using your own funds, or using a company card and then record it as an expense.
Accounting-wise Purchase Invoices and Expenses are exactly the same.
Adding expenses on to the system is designed to be quick and easy. Payment details are recorded at the same time. You don't want to have to raise a purchase invoice each time you buy a small item, like a taxi fair, so you can add an Expense for these items.
Purchases are assigned to a contact and you can come back and record the payment details at a later date.
Accounting-wise Purchase Invoices and Expenses are exactly the same.
Adding expenses on to the system is designed to be quick and easy. Payment details are recorded at the same time. You don't want to have to raise a purchase invoice each time you buy a small item, like a taxi fair, so you can add an Expense for these items.
Purchases are assigned to a contact and you can come back and record the payment details at a later date.
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