I have a client who has kept a mileage log but no fuel receipts.
He is a sole trader who has registered for VAT voluntarily so technically I understand he could use mileage rates but is he able to claim the VAT without the fuel receipts.
If so how is the VAT element calculated?
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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.
I know a lot may disagree with me but providing the mileage record is accurate, then if it can be shown that he subsequently started keeping all his receipts safely, then I would have no qualms in claiming the VAT. It would also be a mitigating factor that he is not required to register but did so voluntarily.
As to the VAT element, with bank transactions you'd use the appropriate fraction: 1/6, 7/47 or 3/23 depending on the date. You might consider looking at the amounts and asking the client if he bought anything else when filling up fuel. There is a recent thread on here about that.
Without bank transactions, then you'd have to use an average of the fuel cost, as it varies so much these days. The AA publish regional fuel costs on their website.
As a new business he has been inputting the cash himself from personal funds.
All I have to go on is the total mileage 2100 miles. This is legitimate as he took a ferry and drove to Italy.
While I have no problem with using the mileage rate for his personal tax, I have no idea how to go about this for the VAT
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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.
He provides services regularly abroad which are outside the scope of UK VAT
He may possible go over the threshold eventually but in the meantime saw it as beneficial to reclaim his VAT on his spending.
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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.
Not a VAT expert but is he using the partial exemption method to calculate the amount of VAT he can reclaim on expenditure if he has services that are outwith the scope of VAT?
I am not sure whether or not services outside the scope of VAT are exempt or not but my feeling would be that they are and therefore you cant reclaim directly related input VAT as well as a proportion of indirect input VAT.
I'm no VAT expert either but I believe that input tax can be claimed if the services being offered that are outside the scope of UK VAT would otherwise be taxable if they were supplied in the UK.
I'm sure there is someone that could clarify this position
Thanks Valerie
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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.
