claiming back VAT on fuel
Discussion
I'm trying to do my first VAT return and i'm confused over fuel.
I pay an allowance for fuel and I log my millage for business use.
my tax inspector said I can claim a certain portion of this back - something like 9p a mile, but as this changes I needed to look the exact figure up for the period.
Problem is I cant find any information on the government website and am now confused lol
The car is old, owned by me - 2.5litre diesel (if that makes a difference)
Can anyone put me on the right path?
I pay an allowance for fuel and I log my millage for business use.
my tax inspector said I can claim a certain portion of this back - something like 9p a mile, but as this changes I needed to look the exact figure up for the period.
Problem is I cant find any information on the government website and am now confused lol
The car is old, owned by me - 2.5litre diesel (if that makes a difference)
Can anyone put me on the right path?
I think Eric will be the man to advise once you've confirmed some of his questions.
I was under the impression you can claim all the VAT back from your petrol on the basis that it was business milleage and recorded as such - company visited, mileage from start point to client and back again.
I was under the impression you can claim all the VAT back from your petrol on the basis that it was business milleage and recorded as such - company visited, mileage from start point to client and back again.
If the business physically pays the petrol bills, then it can claim back ALL the VAT on ALL fuel costs. Obviously, some non-business fuel costs will be included. In order to pay back the "private" element of the Input VAT claimed, the VAT authorities ask you to apply the Fuel Scale Chagr and add this on to your Output VAT.
If the Fuel Scale Charge exceeds the original claim, the best thing is to ignore fuel VAT completely and not bother to claim it back.
If you are paying yourself on a "pence per mile" basis for fuel rather than actually have the business pay the original fuel costs, then you need to work out the VAT content on the fuel element of your "pence per mile" claims. The actual amounts of the pence per mile claims which relate to fuel (and on which the Input VAT can be reclaimed) are set out in the government's advisory fuel rates tables.
Following a revision of the rules a few years ago, the VAT authorities now ask you to retain the fuel vouchers supporting the VAT claim - even on the Pence per Mile claims.
If the Fuel Scale Charge exceeds the original claim, the best thing is to ignore fuel VAT completely and not bother to claim it back.
If you are paying yourself on a "pence per mile" basis for fuel rather than actually have the business pay the original fuel costs, then you need to work out the VAT content on the fuel element of your "pence per mile" claims. The actual amounts of the pence per mile claims which relate to fuel (and on which the Input VAT can be reclaimed) are set out in the government's advisory fuel rates tables.
Following a revision of the rules a few years ago, the VAT authorities now ask you to retain the fuel vouchers supporting the VAT claim - even on the Pence per Mile claims.
Eric Mc said:
That's for company cars. I thought the OP said the car was his own private vehicle?Eric Mc said:
Eric,Not quite sure that this chart is what is being asked for. If I understand the OP correctly, the revenue allow you to claim back the additional VAT element on the 40ppm that one can claim against your business for use of a private car for business purposes. The chart in the link gives the ppm for people using their company cars.
Or....... I may be wrong.
S690
They use the company car fuel allowance as the basis for the Input VAT reclaim on the fuel element.
If you put through motoring costs in your business on a Pence per Mile basis (as opposed to basing the costs on genuine payments to garages and petrol stations), the Revenue have deemed that a certain elelment of those claims is the Fuel Only element. The VAT reclaim on the fuel will then be based on those "fuel only" rates.
For example. if the Fuel Only element is 11p per mile, 2p of that 11p will be reclaimable VAT.
The key factor is that some voucher evidence needs to be retained in the business to support the VAT reclaim. This is nonsense to some extent when fuel is being paid to employee's on a pure mileage basis but a Brussels ruling a few years ago ordained that it was against the spirit of VAT regulations to allow Input VAT reclaims without some original VAT documentation forming the basis of the reclaim. A mileage reclaim sheet submitted by an employee would not be good enough.
If you put through motoring costs in your business on a Pence per Mile basis (as opposed to basing the costs on genuine payments to garages and petrol stations), the Revenue have deemed that a certain elelment of those claims is the Fuel Only element. The VAT reclaim on the fuel will then be based on those "fuel only" rates.
For example. if the Fuel Only element is 11p per mile, 2p of that 11p will be reclaimable VAT.
The key factor is that some voucher evidence needs to be retained in the business to support the VAT reclaim. This is nonsense to some extent when fuel is being paid to employee's on a pure mileage basis but a Brussels ruling a few years ago ordained that it was against the spirit of VAT regulations to allow Input VAT reclaims without some original VAT documentation forming the basis of the reclaim. A mileage reclaim sheet submitted by an employee would not be good enough.
I'll have to pick this up with my accountant. I'm the only employee of my Ltd company and drive my own personal car. The Co. charges clients 40p per mile to attend at their premises and I charge 'my employer' 40p per mile to carry thos journeys out.
I have never kept any petrol receipts as they in no way link or are relevant to business mileage.
Hmmn.
I have never kept any petrol receipts as they in no way link or are relevant to business mileage.
Hmmn.
And that is the fundamental problem.
Before the Brusesels ruling, the UK VAT authorities allowed businesses who operated a "pence per mile" system to claim VAT back on half the rate being paid to the staff. So, if a business paid 28p per mile, the company could reclaim VAT on 14p of that. No actual petrol vouchers needed to be kept.
A similar system was being operated in Holland and it was their scheme that Brussels stamped on. Britain was warned that they needed to change too or they would be hauled up before the Brussels VAT regulators.
In reality, a business should not really be allowed to claim ANY VAT back at all on mileage claims.. When you think about it, who are they paying for the fuel. They are paying the employee/director. Is the employee/director charging the company VAT for the supply of fuel.? No they aren't, so where is the Input VAT that the company can reclaim.
Obviously, the employee was charged VAT when they bought the fuel at the garage. But the employees aren't VAT registered so they personally can't reclaim it.
Before the Brusesels ruling, the UK VAT authorities allowed businesses who operated a "pence per mile" system to claim VAT back on half the rate being paid to the staff. So, if a business paid 28p per mile, the company could reclaim VAT on 14p of that. No actual petrol vouchers needed to be kept.
A similar system was being operated in Holland and it was their scheme that Brussels stamped on. Britain was warned that they needed to change too or they would be hauled up before the Brussels VAT regulators.
In reality, a business should not really be allowed to claim ANY VAT back at all on mileage claims.. When you think about it, who are they paying for the fuel. They are paying the employee/director. Is the employee/director charging the company VAT for the supply of fuel.? No they aren't, so where is the Input VAT that the company can reclaim.
Obviously, the employee was charged VAT when they bought the fuel at the garage. But the employees aren't VAT registered so they personally can't reclaim it.
This confused me..
The rate for a 2 litre+ petrol car is 21p/mile.
So if the employee does 100 miles, and reclaims £40.00 (40p/mile)
The business can reclaim £21*0.175 = £3.68 of VAT on this payment?
And will need to provide VAT receipts for at least £21 of petrol?
The rate for a 2 litre+ petrol car is 21p/mile.
So if the employee does 100 miles, and reclaims £40.00 (40p/mile)
The business can reclaim £21*0.175 = £3.68 of VAT on this payment?
And will need to provide VAT receipts for at least £21 of petrol?
Edited by john_p on Thursday 4th September 18:48
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