Using percentage of cost as expense?

[Michael Hendry]

> On 17 Feb 2015, at 13:02, W Pawlowski <pawlowski.w at gmail.com> wrote:
> 
> Because the car is used for business 90% off the time I am allowed to use 90% of automotive expenses as deduction. In the past my accountant used to calculate that percentage at the end of the year for income tax calculation but now I also have to remit HST on quarterly basis so I thought it would be easier to do this on the fly.
> All my automotive expenses would be treated this way: gas, repairs, etc.
> 
> 

I don’t know about HST - is it something like Value Added Tax in Europe?

This makes it more complicated, because your service station presumably charges HST on materials, parts and labour, and if you’re being charged this tax in the course of your business you can probably reclaim it before assessing your profits.

I think you’d be best to accumulate motoring expenses in a single account, and produce a quarterly statement with the 90/10 split so that you can calculate your HST liabiity. I can see that there might be circumstances where a tax authority might query some aspect of your expenditure, such as a nice paint job and a new engine put in just before you sell the vehicle at a tidy profit...

[I suspect someone on the GnuCash mailing list has already found a solution to your question, which is why I’ve added gnucash-user at gnucash.org <mailto:gnucash-user at gnucash.org> to the cc-list - unless you have a specific reason to reply only to an individual it’s best to use Reply-All (see the foot of this email).]

Michael

> On Feb 17, 2015 4:53 AM, "Michael Hendry" <hendry.michael at gmail.com <mailto:hendry.michael at gmail.com>> wrote:
> 
> > On 17 Feb 2015, at 01:43, W Pawlowski <pawlowski.w at gmail.com <mailto:pawlowski.w at gmail.com>> wrote:
> >
> > I am one man show so I am using my personal car for business.
> > Lets say that 90% of use is for business and 10% is for personal use.
> > Is there a way in GnuCash to have the automotive expense account calculate
> > the percentage automatically and assign 90% of what ever is entered into
> > this account as expense or would I have to do it manually every time I
> > enter my expenses?
> > Thank you.
> 
> I don’t think so, but could I ask why you want to do this anyway?
> 
> At what point in your financial year is the proportion of your motoring expenses allocated to business relevant? Do you (for example) bill someone else on a monthly basis at a rate of 90% of the actual payments during that month? Or is it a matter of accounting for business and personal motoring expenses at the end of the tax year? Are you accounting only for consumables like fuel, oil and screen-wash, or are repairs included? What about a major expenditure like replacement of a clutch?
> 
> Michael
> 
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