If a shareholder/owner-manager who is not an employee is using his personal car for company business, do you use mileage allowance at the prescribed rate to reimburse or do you use a portion of actual vehicle expenses based on pro rata use for business vs personal?
Presumably he/she is an employee?:
We consider an allowance to be reasonable if all of the following conditions apply:
- The allowance is based only on the number of business kilometres driven in a year
- The rate per-kilometre is reasonable
- You did not reimburse the employee for expenses related to the same use of the vehicle. This does not apply to situations where you reimburse an employee for toll or ferry charges or supplementary business insurance, if you determined the allowance without including these reimbursements
Use the prescribed rate to reimburse owner of vehicle. Be sure to claim the HST on the amount as well. Be sure to have some supporting documentation for the mileage claimed.
Highly recommend use of MileIQ which is an app to track business vs personal (no vested interest).
My clients like the application - just swipe right or left to record purpose and KM
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Mile IQ is a great application – very easy to use for people, and can be exported to Excel for whatever purposes. Now it is a paid product as of April 1 (used to be free with Microsoft Office 365).