the directors of the company I work for have calculated their mileage for the last financial year and I've been told that if I have VAT receipts for the fuel they purchased then I could use these to claim back the VAT on the mileage. Is this correct? If so, how do I show this in the accounts (I use Liberty).
If we are talking here about the mileage rates (45p/25p for this year or 40p/25p for last year) then VAT is reclaimable only on the mileage part of the mileage element of the allowance.
See here for the current apportionment of the allowance that is attributable to Petrol :
So, assuming 15p per mile the VAT that you would be able to claim : at 17.5% for last year (*7/47) = 0.02234 per mile VAT and at 20% for this year (*1/6) that would be 0.025p per mile VAT
That means at current rates 10k miles in a 1400cc car would be a payment of £4500 and VAT of £250... Probably not what the directors were actually expecting!
P.S. edited because just realised that I had inadvertently left a sentence in from my original draft of the reply that was no longer applicable in the finished draft.
-- Edited by Shamus on Monday 6th of June 2011 01:50:06 PM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi there, I think that if they are using the amount per mile rate for business use, i.e 45p or 25p then no scale charge is needed, it is only needed if claiming petrol/diesel receips which include a personal element on this. But would appreciate other thoughts on this as I am not 100% sure. Julie
Yes, Julie is right. If you use your car for business and private use and you don't want to go to the bother of recording private mileage, you claim back all the VAT on your petrol receipts but you then pay the fuel scale charge, dependent on the emissions of the vehicle, to compensate for the private fuel use.
