What can I claim back on fuel costs?

dereskejim

I am self employed and use a lot of fuel for agricultural work. I have been told there is a portion of my fuel costs that I can claim back from HMRC. It is not the VAT but possibly a purchase tax.

chrismac1

You can use the element which is a business expense. There are two methods - 45 pence per mile (40 pence before 6 April 11) or claim all motoring bills and then the business miles % divided by the total miles. Whichever method you use the business % of HP interest is allowable. In the second method you can claim the business % of capital allowances.

In the second method you claim the VAT on fuel if you are VAT registered. In the first method there is an amount which varies depending on engine size and type, but generally works out at 3 pence per mile which is VAT and can be claimed on the VAT return.

dereskejim

Thanks for replying. I was not clear on the info I gave. The agricultural use is not on the road so it is red diesel used in farming machinery off road.