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How can you claim VAT on business mileage?

2016
21
JUN

If you are a VAT registered business and you or your staff reclaim mileage for business travel in your own vehicle did you know that you can claim VAT on the fuel element of that mileage?

Every quarter HMRC update the advisory fuel rates – see here for the current rates.  The mileage you claim at 45p per mile (or 25p if over 10,000 miles per annum) has a fuel element which is the advisory fuel rate.  This rate is dependent on the engine size of the car and the fuel it uses – petrol, diesel or LPG.

Claiming fuel on car mileageIf, for example, your car engine size is 1401cc to 2000cc and uses petrol and you claim 45p per mile in the period March to May 2016, then 13p of that 45p is fuel.  You can therefore claim the VAT element (1/6th) of that 13p if you are VAT registered – as long as you have VAT fuel receipts to support that VAT claim.

So if you were claiming 100 miles at 45p, you would claim £45 and of that £13 would be fuel and you could claim £2.16 of VAT.  You must, however have £13 of fuel receipts to support that claim.

Complicated?  Not really.  But if you have a bookkeeper this is something they should be doing for you.

If your company owns the vehicle this calculation is not applicable as you will claim all fuel as an expense of your business and repay any personal use.

Related Tags:  Expenses |  VAT | 
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