claiming vat back on mileage

longforgotten

I thought it was possible to claim back the input tax on only the fuel proportion of the 40 per mile paid to employees for the use of their vehicle for business miles.... using the HMRC advisory rates if the car's fuel is 13p , and if the employee provides enough fuel invoices to cover this fuel, the employer can claim the vat.

Trouble is I've been hearing that some are claiming vat within the whole 40p per mile.

Who is right please ?

JasonLVC

If they're claiming the VAT on 40p per mile then they're doing it wrong.

The VAT you can claim is the VAT on the 13p (or whatever the rate is for the size of vehicle).

The calculation, is mileage x rate x 7 /47 (VAT fraction) so a claim of 2,000 miles x 13p per mile (advisory rates) * 7 / 47 = £38.72 input tax reclaimed.

If you did it on the 40p per mile it would 2,000 miles x 40p x 7 / 47 = £119.14 which means they've overclaimed VAT by £80.42

If HMRC pick up on this, they'll assess for the overpaid VAT (ie, they'll want it back), plus penalty of upto 30% of the overclaimed VAT plus interest.

chrismac1

Jason is spot on with his workings. You need to know 2 things about each car :

Petrol or Diesel
Engine Size

Company cars - advisory fuel rates from 1 June 2010


Find this page of the HMRC website, and use the rate there for each individual car involved, and Jason's formula - but recognising this is 17.5/117.5 right now, was 15/115 during 2009 and will from Jan 2011 become 20/120.

Many local aco!!!!ants round here miss this element of VAT reclaim.

John_Pierpoint

S!!!!horpe?;)

hopefulfooluk

John_Pierpoint wrote: »

S!!!!horpe?;)

I was thinking of that lake in the Lake District - what's it called...

Wastwater

John_Pierpoint

Yes I think I know what you mean. It is less than a year ago that they had those floods up there. You would have needed to be up the creek with something a lot bigger than a paddle in those conditions.
http://www.youtube.com/watch?v=ih4G-14Y73k

I think we had better get back from these crossword clues or our tax postings will never get taken seriously again.

chrismac1

I was thinking of that lake in the Lake District - what's it called...

I live in the Lake District - maybe you maent Great Cokkup or Little Cokkup..........

John_Pierpoint

I thought it was I'm-only-a-little-paddle-but-when-I-grow-up-water.