I completely understand your concerns about tracking mileage and how it impacts your financial statements, @theholistichamper. It’s an important topic for managing business expenses, especially when it comes to vehicle mileage. I'll explain the two primary ways to handle mileage expenses and offer some recommendations to help you out.
The reason why your mileage entries show up for tax purposes but not on your P&L is because your mileage allowance is calculated based on HMRC’s flat rate, which is primarily intended for tax deductions. This doesn’t categorise mileage as a direct expense in the accounting records. This is called The Simplified Method.
The Actual Expenses Method, on the other hand, requires keeping track of all vehicle-related costs like insurance, fuel, and repairs. These costs can then be entered into QuickBooks as transactions (or categorise them directly if the bank account is linked), making them visible in the P&L statement.
To ensure you maximize your tax benefits, I recommend that you accurately enter all business trips in your mileage tracker. If you choose the Simplified Method, you need to stick with it for that vehicle. If you're thinking about switching to the Actual Expenses Method, it's best to consult with an accountant or tax professional. They can provide guidance on HMRC guidelines and help you understand the impact on your business finances.
For additional information, refer to this guide: Car mileage and travel expenses explained in QuickBooks Self-Employed.
If you experience any issues with mileage tracking in the future, you can find support specific to your device:
For further questions or if there's anything specific you'd like to discuss further, please don't hesitate to reach out. Your success is important to me, and I want to ensure you have all the information you need to make the best decisions for your business. Take care, and I look forward to hearing from you soon!
