Fuel Disubursement

Fuel Disubursement

Didn't find your answer?

A Vat registered estate agent employes a Valuer at his company. The employee uses her personal car and claims dirbusement from the employer on a monthly basis as a cheque, upon presentation of fuel receipt

1) Is the client employer able to claim back full VAT on the fuel?
2) what are the rules surrounding disbursements and VAT.

any further information and explanations would be greatly appreciated.

kind regards

TOM
Tom

Replies (2)

Please login or register to join the discussion.

avatar
By User deleted
22nd Apr 2008 16:22

Fuel Disubursement
Thank you for your answer Mark.


regards

Tom

Thanks (0)
avatar
By User deleted
21st Apr 2008 19:31

(1) Income tax and (2) VAT
BOTH taxes need consideration here.

First the employee MUST keep a log of business mileages, if this is not done then there's no point proceeding any further and instead start looking at a Benefits In Kind declaration and VAT car fuel scale charges.

Assuming that the "right thing" is done by recording business mileage then :-

1) Income Tax - make sure that the fuel reimbursement is at a rate of no more than 40p per mile (1st 10k pa., thereafter 25p per mile). This assumes that the employee pays for all other car costs herself personally.

2) Fuel - VAT can be reclaimed on the basis of the following mileage rates (in recent years these have been changing twice pa.) :-
** These are the rates wef. 1 January 2008**

PETROL : 0-1400cc : 11p per mile fuel value
PETROL : 1401-2000cc : 13p per mile fuel value
PETROL : 2001cc + : 19p per mile fuel value
DIESEL : 0 to 2000cc : 11p per mile fuel value
DIESEL : 2001cc : 14p per mile fuel; vale

So, if 100 business miles are recorded by the employee in a month ...

Income Tax : reimburse no more than 100 x 40p = £40.00 tax free

and if a 1401-2000cc petrol car,
VAT : 100 x 0.13 = £13.00 fuel value, VAT reclaim on this 7/47 x £13.00 = £1.94. The employee must supply you with at least £13.00 of fuel receipts to justify the stated VAT claim amount.


Thanks (0)