Reclaiming VAT on a credit purchase made by company director?

Grumpy_chap

The odd thing, according to my understanding, is that when an employee claims business mileage at the AMAP rates, then the input VAT that can be stated remains constant even though the mileage rate changes.  So, first 10k miles are paid at 45 pence/mile and after that paid at 25 pence/mile.  The VAT is unchanged.

However, if the employee changes car and that puts the claim into a different band, then the input VAT varies.

As I understand it, the reason for the above is that the input VAT is assessed against the fuel cost but not the other capital and running costs covered by the AMAP.

Really, the fact this is a "deemed" calculation of input VAT shows the irrelevance of the fuel receipts.

I am not sure that it is only small businesses that would fall foul of this rule - I have worked for some quite large companies where mileage is simply claimed by the employee submitting an expenses claim stating the mileage and purpose of journey.  Maybe the larger companies don't fall foul if they simply don't bother claiming the input VAT because the value claimable is less than the cost of collecting and administering receipts.

No doubt someone will clarify the correct interpretation.