Company car excess VAT? - Please help

RSTurbo

Hi All,

I'm just after a little advice please.

I'm a service engineer who has a company car. This includes personal use and i keep the car 24/7.

Now at work we also have a communal van for the larger equipment we install from time to time.

Basically to cut a long story short, i had a mishap and damaged the van whilst reversing into a stationary object around a blind corner, Being the type of guy i am i confessed to the damage. Now the van went in for repair which the company i work for paid and i agreed to foot the bill for the excess as it was my fault. It also states in our contract that in the event of an accident in a company vehicle we are liable for the excess of £250.

Now rather than paying the amount out in full to the company i work for, we came to an agreed payment plan for X amount over monthly instalments which would come out my wages.

I later received an invoice from the company i work for the which states the following:

TOTAL NET AMOUNT: £250
TOTAL TAX AMOUNT: £50
CARRIAGE: £0
INVOICE TOTAL: £300

Now if the excess is only £250, i can't understand why i'm being charged £300? From previous insurance policies i've never heard of any VAT being applied? Are they trying to make money off my back?

Could someone please help before i go in and make myself look an idiot next week when i query this.

I have had some advice regarding the matter but mainly mixed answers.

Many thanks.

le_loup

No, they will not make money from you but the tax man will.
This is the weirdest way of dealing with such a matter that I have ever seen. They are treating your misshape as a sale. The accounts department obviously hasn't a clue.

RSTurbo

Thanks for your reply. I know which is what i cannot understand. It's almost as if I've bought the excess.

sheramber

As I understand it with a business insurance if the company are registered for VAT the insurance do not pay the VAT on a repair but pass it on to the company along with the excess.

The business pay the VAT , along with the excess, but they can reclaim VAT .

It seems your company have passed it on to you but you could point out that they can reclaim it rather than charge you.