VAT reclaim on mileage by employee
Discussion
Does anyone know if the company can recaim the VAT (or the fuel element at least) of mileage allowances we pay to empoyees to use their own cars fpr business?
I pay myself 40p a mile, and I erecall that 9p a mile is the fuel element. If we have receipts for the fuel can the comopany reclaim the VAT on the 9p a mile? At the moment we don't reclaim it.
I pay myself 40p a mile, and I erecall that 9p a mile is the fuel element. If we have receipts for the fuel can the comopany reclaim the VAT on the 9p a mile? At the moment we don't reclaim it.
Check out the techniques and restrictions that need to be applied when claiming back VAT on mileage.
You must remember that the 40p and 25p claims are not based on fuel only - but cover the full running costs of a car. Some of those costs (insurance, road tax, MOT etc) do not have any VAT content and that should be reflected in the VAT reclaimed.
Up until a while ago (2006?) HMRC used a simple formula. Basically, they allowed the VAT content of 50% of mileage claims to be reclaimed and no supporting VAT vouchers were required (the employees expense claim form was, in effect the "Evidence of Expense"
. A directive from Brussels (aimed at the Dutch VAT authorities, actually) forced HMRC to revise their approach.
They now have no hard and fast set out method for making these claims. I would suggest that the old techniques still be used but that fuel receipts be stapled to the employee/durectors' expense claim forms (this was not required under the "old" system".
You must remember that the 40p and 25p claims are not based on fuel only - but cover the full running costs of a car. Some of those costs (insurance, road tax, MOT etc) do not have any VAT content and that should be reflected in the VAT reclaimed.
Up until a while ago (2006?) HMRC used a simple formula. Basically, they allowed the VAT content of 50% of mileage claims to be reclaimed and no supporting VAT vouchers were required (the employees expense claim form was, in effect the "Evidence of Expense"
. A directive from Brussels (aimed at the Dutch VAT authorities, actually) forced HMRC to revise their approach. They now have no hard and fast set out method for making these claims. I would suggest that the old techniques still be used but that fuel receipts be stapled to the employee/durectors' expense claim forms (this was not required under the "old" system"
. Eric Mc said:
Check out the techniques and restrictions that need to be applied when claiming back VAT on mileage.
You must remember that the 40p and 25p claims are not based on fuel only - but cover the full running costs of a car. Some of those costs (insurance, road tax, MOT etc) do not have any VAT content and that should be reflected in the VAT reclaimed.
Up until a while ago (2006?) HMRC used a simple formula. Basically, they allowed the VAT content of 50% of mileage claims to be reclaimed and no supporting VAT vouchers were required (the employees expense claim form was, in effect the "Evidence of Expense". A directive from Brussels (aimed at the Dutch VAT authorities, actually) forced HMRC to revise their approach.
They now have no hard and fast set out method for making these claims. I would suggest that the old techniques still be used but that fuel receipts be stapled to the employee/durectors' expense claim forms (this was not required under the "old" system".
You must remember that the 40p and 25p claims are not based on fuel only - but cover the full running costs of a car. Some of those costs (insurance, road tax, MOT etc) do not have any VAT content and that should be reflected in the VAT reclaimed.
Up until a while ago (2006?) HMRC used a simple formula. Basically, they allowed the VAT content of 50% of mileage claims to be reclaimed and no supporting VAT vouchers were required (the employees expense claim form was, in effect the "Evidence of Expense"
. A directive from Brussels (aimed at the Dutch VAT authorities, actually) forced HMRC to revise their approach. They now have no hard and fast set out method for making these claims. I would suggest that the old techniques still be used but that fuel receipts be stapled to the employee/durectors' expense claim forms (this was not required under the "old" system"
.I have inserted a fomular into my monthly sheest that takes a fuel element of 9p in the 40/25p, and the reclaims the VAT on that. In fact that is pretty close to the actual fuel cost, which I think is about 10p a mile. I have the VAT receipts for most of the fuel. Seems sensible and reasonable to claim for fuel what I was claiming before on the company car.
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