Claiming VAT Back on Mileage - The Book-keepers Forum (UK)

buckland10 · Veteran Member

Claiming VAT Back on Mileage

Shamus · Forum Moderator & Expert

Hi Eva,

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 :

http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

For example, for a petrol car under 1400cc only 15p of the 45p is related to the cost of fuel.

Here's the link to the historic rates as you will need the figure for last year :

http://www.hmrc.gov.uk/cars/advisory_fuel_archive.htm

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edited because just realised that I had inadvertently left a sentence in from my original draft of the reply that was no longer applicable in the finished draft.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

buckland10 · Veteran Member

Thank you very much - that actually makes sense!

mushroom · Senior Member

Hi, just checking, would claiming back the VAT in this way make the car subject to the fuel scale levy?

Julie Hall · Senior Member

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

Stardoe · Guru

Hi there,

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.

Pauline