VAT Mileage Claim

benji7278_2

Hi All

Hoping to get an undertstanding of claiming VAT back on mileage

I am starting a new role in December, of which i will be paid a monthly allowence of £450pm before tax, and then 37p per mile to cover fuel in my own Car. My employer provides mileage payments that varies depending on the engine size of the vehicle. Mine being a 2.2 ltr petrol sits me in the forementioned band.

I will be covering roughly 30k Business miles per year. Now i understand that VAT can be claimed back on 10k miles? But how does it affect me in terms of the amonunt i can claim etc? Will i lose out for declaring this? Payments for mileage will be paid to me as part of my expenses claims, which occur weekly.

Any help would be apreciated.. Struggling to get my head around it all...

Thanks

WellKnownSid

You get 45ppm tax free up to 10,000 miles, then 25ppm tax free after that, in any given tax year. If you receive less than this, then you need to keep a record as there will be some tax relief due.

You will need to provide your employer with all of your fuel receipts showing the VAT breakdown along with confirmation as to the business miles split, engine size, etc... They will then be able to claim back some VAT on the fuel element of the mileage allowance they've paid to you.

Keep_pedalling

You can't claim VAT back, and by the look of it you won't be able to claim any income tax back either as you are getting substantially above the 25ppm for two thirds of your milage claim.

WellKnownSid

Keep_pedalling wrote: »

You can't claim VAT back, and by the look of it you won't be able to claim any income tax back either as you are getting substantially above the 25ppm for two thirds of your milage claim.

The employer can... but only if the employee keeps a sufficient record of having purchased the petrol in the first place, which is probably why it was mentioned and hence the confusion ("you will need to keep appropriate records in order to claim back the VAT" or something like that).

Standard practice would also be for the mileage rate paid to revert to 'substantially less' than the 25ppm once over 10,000 miles.

"You'll get 37* pence per mile"
*for the first five miles, then we'll pay you damn all

Bigphil1474

I get £81 p/m and 40.9ppm, but I only do about 5k miles per year (mostly urban miles in my district). We have to submit fuel receipts to our employer when we claim the mileage back, and it's they who claim the VAT back - generally the receipt needs to be about £1 for every 10 miles claimed. I work in the Public sector though, so it might be different for private sector.
When I last looked into it a couple of years ago, I found that the basic formula is : monthly payment + mileage payment, divided by the number of miles claimed, has to be less than 45p per mile for any chance of claiming anything. At the rate you've said, for 30k miles per year, you'd be getting about 55p per mile overall. In all likelihood your tax code will change and you will lose some of your tax free allowance. (monthly average - £450+£937/2500 = 55.5p per mile).
You can claim for work related mileage that isn't paid for by work , which occasionally I end up doing but try to avoid e.g. work to site visit to home, they only pay the difference between that and my normal work-home journey, which might be 1 mile. The amount is pennies though for me, although with your mileage it might add up.

WellKnownSid

Bigphil1474 wrote: »

When I last looked into it a couple of years ago, I found that the basic formula is : monthly payment + mileage payment, divided by the number of miles claimed, has to be less than 45p per mile for any chance of claiming anything. At the rate you've said, for 30k miles per year, you'd be getting about 55p per mile overall.

No, the OPs car allowance is before tax, so can be ignored for the purposes of tax reclaim. He only gets 37ppm (almost certainly only up to 10,000 miles) so there will likely be a small refund due.

marlot

https://forums.moneysavingexpert.com/discussion/5349240

WellKnownSid

marlot wrote: »

https://forums.moneysavingexpert.com/discussion/5349240

There is a lot of disinformation on that thread, by people who have obviously never completed a VAT return in their life. The fact is, in order to justify the input tax, HMRC themselves advise that all fuel receipts are submitted.

Rain_Shadow

WellKnownSid wrote: »

There is a lot of disinformation on that thread, by people who have obviously never completed a VAT return in their life. The fact is, in order to justify the input tax, HMRC themselves advise that all fuel receipts are submitted.

Haha, you aren't kidding. When you see so much rubbish spouted, about something you know about, you question the value of any advice given here.