First VAT return - question about Fuel

lisa76

I've got my first VAT return coming up and I've got a few questions (and no doubt I'll be along with a few more later).

I'm using VT Cashbook which I'm finding great and really easy to use.

1. Returns to be made in respect of periods ending 31 July 09 - so seeing as started the business 6th April 09, and this is first return - I go back to day one for the VAT return? Also does this mean that everything up until and including the 31st is included? Am I right in thinking I've got a month to file the return and pay any dues (I'll be doing it within days though).

2. Haven't decided what method to use for fuel - probably going to go down the 40p route, but not sure yet. Now reading on the HMRC website I was getting a little confused with how this affects VAT. I don't think I can claim it back if the vehicle is used even slightly for personal use. Is this correct? And would I simply go back into my accounts and make the fuel entries no VAT?

Thanks in advance.

chickmug

I can't help with the details you want but I always used to call the Vat helpline and over the years always found them extremely helpful.

martindow

lisa76 wrote: »

2. Haven't decided what method to use for fuel - probably going to go down the 40p route, but not sure yet. Now reading on the HMRC website I was getting a little confused with how this affects VAT. I don't think I can claim it back if the vehicle is used even slightly for personal use. Is this correct? And would I simply go back into my accounts and make the fuel entries no VAT?
Thanks in advance.

You can claim 40p/mile (up to 10 000 miles then 25p) for income tax but this cannot be used for VAT. You can either apportion all the costs for the car (not just fuel) according to the percentage of mileage that is business. This does involve careful record keeping of milometer readings, noting destinations and purposes of each journey but you could also use this for income tax. The other VAT method is to pay a scale charge and you can then claim all of the VAT on fuel regardless of whether it is private or business mileage. This is simpler and can be good if you do a lot of private mileage. Either way you need to keep VAT receipts for fuel.

Don't be afraid to phone the VAT people - I have always found them very helpful.

lisa76

I am keeping very careful mileage records, and I think the business mileage is about 65% at the moment. I think a call to the VAT people tomorrow is in order - thanks everyone

chickmug

lisa76 wrote: »

I am keeping very careful mileage records, and I think the business mileage is about 65% at the moment. I think a call to the VAT people tomorrow is in order - thanks everyone

Are you sure it is not 90%?

Start higher and then you can come down

lisa76

I am scared stiff of fines etc, so I'd rather underestimate the business mileage than over estimate! I am going to sit down and work it out properly tomorrow, then phone the VAT people for some advice.

What about the returns date and payment dates - have I got that bit right?

chickmug

lisa76 wrote: »

What about the returns date and payment dates - have I got that bit right?

Your understanding of your position in your OP is right.

lisa76

thanks chickmug - VT cashbook keeps telling me that my return should start on the first of a month, so just wanted to check!

chickmug

lisa76 wrote: »

thanks chickmug - VT cashbook keeps telling me that my return should start on the first of a month, so just wanted to check!

The last Vat return I did (after doing a great number) was about one year ago and you are getting me worried in case I am out of date as rules can and do change. So please ask when you call them or I will worry now

lisa76

I think it's only saying that because the business started on 6th April, and the next VAT return will run from 1 Aug until 31 October I guess - I will ask though and if they say anything I'll let you know.

schneckster

Check the dates on the return reminder... chaeck period and filing dates. There'll be a month between.

If the period ends 31st july, then the return must be in and paid by the end of august.... it also means you can't file it until august as all of july's transactions will not be included as 11 days worth haven't happened yet.

If the return must be in by 31st july, then the period actually ended 30th june in which case you should have records of all transactions and are able to complete your return.

Your period dates are usually the end of the third month after registering and every 3 months after that. You get a month from period end to file and pay. So for example, period ending july must be paid by end of august. If your business started in april, then probably june is the end of the first period.

You can claim VAT for 3 months before registering for VAT. Just include it on your first return.

If in any doubt, ring the helpline. HMRC are actually quite nice and helpful... unless you try to deceive them which is when they get annoyed and throw the book at you - while it's still in the bookcase!!!

Schneckster