What vat can i claim back on mileage

So, at the time of writing this blog remember to check HMRC's current rates , if you've got a petrol car which is cc , then you can claim 16p of the 45p as fuel.

So for every business mile you claim 45p for, you can reclaim 2. We advise most of our clients to use Xero or FreeAgent they're included in our WorkSmart package - and posting your mileage correctly is a walk in the park!

Now we haven't talked about making sure that your journey is a valid business journey in the first place, or, if you're a sole trader or in a partnership, whether you should be using the 45p per mile allowance or claiming for your car costs totally differently. And if you're trading as a limited company, you might want to look at our blog covering at the pros and cons of buying your car through your limited company.

If an employee uses a private car for business purposes beyond the standard commute, the employer can make a claim against the approved mileage allowance payment rate to reclaim some money back. The amounts that can claimed will depend on certain factors determined by HMRC. When an employee uses a private car for business purposes and claims mileage at the pre-defined rates currently 45p per mile for the first 10, miles and 25p per mile thereafter , the mileage relief is granted from a wage tax perspective.

If an employer pays more than these amounts, then the additional amount paid will be taxed as income. If an employee has been given a company car and claims mileage for fuel from the employer employee pays for his own fuel , then the published HMRC advisory fuel rates reflect the assumed cost of the fuel incl. VAT consumed per mile. These rates are reviewed and amended periodically. The VAT on electricity cannot be recovered as electricity is not considered fuel for car fuel benefit purposes.

HMRC specifies that the 45 pence per mile or the 25 pence per mile is meant to cover expenses beyond fuel, such as fixed expenses insurance, road tax, depreciation and the variable wear and tear costs of running your car. HMRC clarifies that if you claim over 10, miles, then you have been reimbursed for the business portion of the fixed costs of owning a car. If you drive your own car 2.

If you employ staff who drive their own vehicle for business trips, then you can claim the VAT on their fuel too. There are, however, some caveats:. The answer is yes, you must keep the fuel receipts if you want to claim the VAT on the mileage expenses.

Fuel receipts from other countries in the EU cannot be used. Likewise, there is no VAT on fuel in Guernsey, so fuel receipts purchased in Guernsey cannot be used.

Yes it does — a claim should only be made if supported by receipts. And HMRC can levy penalties for incorrect returns. HMRC have discretion to accept a claim, where the evidence is missing and other evidence of the purchase is available VAT Regulations , s.

Sometimes the HMRC documents can seem confusing, for instance the document When you can use Advisory Fuel Rates states that Advisory Fuel Rates can only be used for company cars or when employees repay the cost of fuel. If you are a VAT registered business paying mileage expense to you or your staff, you can claim back VAT on the fuel-only portion of the mileage expense — but remember to collect VAT receipts for fuel purchased to back up the claim.

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Want to know how to claim mileage allowance when using your private vehicle? Tripcatcher has the answers.