This guide shows how to record business mileage in QuickFile when you travel in your own vehicle and pay for it from your own personal funds.

QuickFile doesn’t have a separate mileage claim form. Instead, you set up a supplier for your approved mileage, log your journeys on a purchase, and then mark the purchase as paid from the account that shows what the business owes you. The expense appears under Travelling in your accounts.

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What counts as business mileage?

Business mileage is mileage you travel whilst doing your job. It can include travel to a temporary workplace, but it doesn’t include:

• Normal travel between home (or anywhere that is not a workplace) and your permanent workplace
• Private travel

You can normally reclaim a fixed amount per mile for approved business mileage. HMRC sets these approved mileage rates, and they can change from one tax year to the next. Check the rate for the tax year of each journey on GOV.UK: Travel - mileage and fuel rates and allowances.

Step 1: Create a supplier for your mileage

First, create a supplier called Expenses - Approved Mileage. It holds all your approved mileage claims in one place. You only need to do this once.

1. On your Dashboard, click the round blue + button, then click Create a new supplier.

   

2. In Company Name, enter Expenses - Approved Mileage.

   

3. Click the Options tab. Change Default VAT Rate to 0 and set Default Purchase Category to Travelling.

   

   Please note: The category list is searchable: type “Trav” and choose Travelling (not Overseas Travelling).

4. Click Save Details.

These defaults fill in automatically on every new purchase for this supplier, and you can still change them on an individual purchase.

Step 2: Log a purchase for your mileage

1. On your Dashboard, click the + button, then click Log a purchase.

   

2. In Supplier Name, start typing Expenses and select Expenses - Approved Mileage from the list.

3. Check the Receipt Date. It’s the date QuickFile uses for the expense in your accounts, so use a date in the period the mileage belongs to.

In most cases you’ll want to log your approved mileage periodically, for example monthly, or just before the year end. You can log a single purchase for every journey, but this guide assumes you’re doing it in bulk. Another thing you can do is keep editing and updating a single purchase throughout the year, like an open ledger: open the purchase and click Modify to add new journeys.

Adding your journeys to the purchase

Once you’ve chosen the supplier, the first line changes to the Travelling category with a VAT Rate of 0%, based on the supplier’s defaults. Keep the category as Travelling: your accountant will use it later when preparing your accounts.

Add each journey on a separate line. In the Description field, include:

• the date of the journey
• the reason for the journey
• the number of miles travelled
• the rate reclaimed (for example 55p). Use the current HMRC approved mileage rate for the tax year of the journey.

1. Enter the first journey in Description.

2. In Sub Total, enter the amount for that journey (miles x rate).

3. Click the green + at the start of the line to add a line for the next journey. New lines also use Travelling and 0%.

4. When you’ve added all the journeys, click Save Details.

   

When you save, QuickFile confirms that the purchase has been saved and that no payment has been allocated to it yet. As previously stated, you can add new lines for each journey as and when you need to. That way you’re keeping a record of all your approved mileage through the year.

Step 3: Record the payment

Until you record a payment, the purchase shows as UNPAID in your books. Before you run your year end, close it off by marking it as paid from the account that shows what the business owes you. Which account that is depends on how your business is set up:

If you’re logging the purchase now

1. In Payment Details at the bottom of the purchase, tick Paid. QuickFile fills in the Amount with the full total.

2. Check the Payment Date, and in Paid From select the account from the table above, for example Proprietor Drawings Account.

   

3. Click Save Details.

If the purchase is already saved

1. Open the purchase and click Log Payment.

   

2. Tick Pay in full, check the Payment Date and select the account in Paid From.

   

3. Click Save. QuickFile confirms that the payment has been attributed to the purchase and that it’s now fully paid up.

   

Limited companies

As a limited company you would typically pay this purchase from the Directors’ Loan Account. This account tracks what money the company owes the director(s) at any given time. Paying the mileage purchase from the Directors’ Loan Account creates a negative balance in the account. An overdrawn Directors’ Loan Account shows a liability that the company has to its director(s).

When you want to pay these expenses back to your personal account, withdraw the funds from the company’s current account and tag the payment as a transfer to the Directors’ Loan Account (see Step 4). This balances out the entry made when you paid the mileage purchase.

Sole traders

For sole traders the mileage purchase would normally be paid from the Proprietor Drawings Account. Unlike limited companies, a sole trader’s business is all under one legal entity (which is you), and the Proprietor Drawings Account offers a way to separate personal items from business transactions. When the mileage purchase is paid from this account, it shows that those funds are owed to the sole trader by the business. When you’re ready to pay yourself back, tag the payment from the business bank account as a transfer to the Proprietor Drawings Account (see Step 4), which nets off the original payment.

Non-limited partnerships

For non-limited partnerships the process is the same as for sole traders. The only difference is that, instead of the Proprietor Drawings Account, you pay the mileage purchase from the applicable Partner Drawings Account.

Step 4: Pay yourself back

When the business pays you back for the mileage, the payment leaves the business bank account. Tag it as a transfer to the same account you used in Step 3, so it isn’t counted as a second expense.

1. Go to Banking, open the business bank account and find the payment to you (or add it with New Transaction as Money Out).

2. Click Tag Me next to the payment and choose Bank transfer between accounts.

   

3. In Transfer to account, select the account you paid the mileage from, for example Proprietor Drawings Account, then click Continue.

   

The Proprietor Drawings Account (or Directors’ Loan Account) now shows the money coming back in, which balances the payment you recorded in Step 3.

Troubleshooting

My mileage isn’t showing in the Profit and Loss report, or it’s in the wrong year

The purchase is what puts the mileage in your Profit and Loss, whichever account you mark it as paid from. Check the purchase’s Receipt Date: if it’s outside the period you’re looking at, the expense appears in a different year. Open the purchase, click Modify and correct the date.

I forgot to log mileage for a year I’ve already closed

To include it in that year, undo the year end, add the mileage purchase with a date in that year, and then run the year end again.

Can I use a journal instead of a supplier?

Some users prefer a journal (for example, debit Travelling and credit Proprietor Drawings). Either way works as long as you keep proper records of each journey. If you use a journal, give every line a description, or QuickFile highlights the lines as errors.

I want to charge mileage to a client

This guide covers mileage you claim for yourself. To pass a cost on to a client on a sales invoice, see Rebilling Expenses.

Related topics

New to bookkeeping in QuickFile? Start with Sole Trader Bookkeeping - The Basics or Limited Company Bookkeeping - The Basics for how drawings and the Directors’ Loan Account work.

• Sole Trader Bookkeeping - The Basics: How to keep business and personal money apart, and where drawings fit in.
• Limited Company Bookkeeping - The Basics: What the Directors’ Loan Account is and how it tracks what the company owes you.
• Self employed expenses: Record other business costs you’ve paid out of your own pocket as a sole trader or partner.
• Recording your purchases: More on the purchase form: suppliers, dates, categories and payments.
• Tagging your bank transactions: How Tag Me works, including bank transfers between accounts.
• Rebilling Expenses: Pass a cost such as mileage on to a client’s invoice.