Private car and recording fuel on the vat return

Private car and recording fuel on the vat return

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How do I account / record for fuel in these circumstances.

1.Two private cars used in business, the business paying 15p per mile advisory rate. The mileage is logged to match/justify  the fuel payments which are paid through the company bank account at least twice per week.

2. How do I record the amounts in the accounts/vat return? Individually per fuel payment with expense/vat/bank or just as monthly gross receipts - expense/bank ignoring the vat.

3. I then claim back the vat element at 2p of the total miles logged using the fuel advisory rates. Do I just work out a manual entry to include in my  inputs on the vat return.

4. Do I need to account for any output vat as well as input vat on the vat return or is this just for a company car.

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chips_at_mattersey
By Les Howard
30th Aug 2012 08:57

Paying Mileage Rate

recording payments and claiming VAT - there are a number of options!

You could create a journal or invoice for each payment, for each week, or for each month - depends on which is more convenient. The key is that you provide the original data to justify the entry.

There is no need to account for output tax too - see http://www.hmrc.gov.uk/briefs/vat/brief1112.htm

hope that is clear

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By ShirleyM
30th Aug 2012 09:15

What are you doing?

Are you paying for the fuel through the company (and reclaiming VAT), and then charging the drivers for private fuel used, or are you paying drivers fuel rates for business use?

Your mention of output VAT implies that the company is receiving fuel payments from the private car owners, rather than making them to the private car owners. I am maybe reading your post wrong, but it isn't clear to me.

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Replying to txcjg:
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By Marky
30th Aug 2012 12:00

The drivers fuel up with a business card and all the amounts are paid by the company. Although the cars are privately owned the fuel paid by the company is all business justified with a mileage log from the employees at the advisory rates.

I would like to reclaim vat on these amounts and was wondering how I input these into the vat return and record the fuel payments through the bank/accounts. Should they be entered in the bank as GROSS amounts picked up by box 7 or as NET amounts and showing the vat from the fuel receipts on the vat return prints.

If the amounts paid by the company to the employees in any one month  can't be justified by the mileage log then there is an element of private usage and I presume that I would need to make a manual adjustment on the amount of VAT that I can reclaim. Would this also trigger a P11D on the employees?

Am I complicating this or is there an easier way to manage this?

 

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By ShirleyM
30th Aug 2012 12:27

You cannot reclaim VAT on the fuel bought. You can only reclaim VAT on the mileage payments made for business use.

The drivers should be buying their own fuel, and you pay them the agreed rate per mile, and you can then reclaim VAT on the fuel element of the mileage payments.

You can't pick and mix, ie. pay for all the fuel, and then charge the drivers for the part that isn't business mileage. How will they work out what mileage rate you have paid them, so that they can claim the full 45p tax relief?

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