I know this question has probably been answered numerous times on this forum but i can't find it!! Can someone explain to me how i claim back VAT on fuel used for my business when using my own car. What would really help is a simple example or explanation as i just don't get the fuel sclae charges sheet. Many Thanks for all your help
-- Edited by Boo on Monday 18th of May 2009 08:31:47 PM
You only need to account for the VAT fuel scale charge if your vehicle is a business asset, you use it for personal trips and you reclaim VAT on petrol expenses. Basically you need to credit your vat a/c i.e increase the liability, and debit the expense a/c i.e. motor expenses.
If the vehicle is not a business asset then you should really claim for a mileage allowance up to 40p per mile. This covers the fuel used together with the general wear and tear of the vehicle.
if your company pays you a mileage allowance, then the company can reclaim VAT on the fuel element of that allowance. HMRC publish the rates (sorry I can't find a link at the mo!).
You need to provide company with VAT receipts to the value of the VAT being reclaimed.
Thanks for your replys - So just to get it clear in my head- the car is not a business asset it is my personal car, but about two days a week i use it for work, so am i right in thinking as an example if i went 50 miles i could then claim £20 back on my VAT return ???? thanks for your help here!!
The car can be a business asset if you introduce it into the business. You would then be able to claim petrol expenses, repairs, capital allowances etc. If you are VAT registered you could then reclaim VAT on the petrol subject to the VAT fuel scale charge and having a valid VAT receipt.
If you want to keep the car out of the business and instead claim a mileage allowance, the total allowance you could claim on 50 miles would be £20. The VAT you can reclaim on this would be based on the engine size of your vehicle. If for example your car had a petrol engine size of 1400cc or less, then you could reclaim £0.65p as VAT. This is calculated by multiplying the fuel rate of £0.10p by the number of miles incurred then applying the VAT fraction i.e.
£0.10p x 50 miles = £5 £5 x 3/23 = £0.65p
If you claim the £0.65p as input VAT on your VAT return the net cost of the mileage claim in your accounts would be £19.35.
