VAT on mileage allowance

VAT on mileage allowance

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Hi,

Just wondering if a member of my staff uses his own car and i pay him .40p a mile how much can i claim back in vat. i know this depends on engine size so lets just say he drives a 1.2l petrol?

I've got this figure of .09p per mile but is that the vat rate or the amount that vat can be claimed from? ie mileage x .09 or 17.5% of mileage x .09?

Can anyone help?
Gregory Mandry

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Euan's picture
By Euan MacLennan
17th Jul 2007 13:05

7/47 of advisory fuel rate
You can claim as input tax 7/47 (17.5/117.5) of the advisory fuel rate published by HMRC. For a petrol car under 1400cc, the rate is currently 9p, but it goes up to 10p for journeys after 1st August.

You need sufficient VAT invoices to cover the VAT claimed.

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By Gregory Mandry
18th Jul 2007 16:03

to summerise
"You can claim as input tax 7/47 (17.5/117.5) of the advisory fuel rate published by HMRC. For a petrol car under 1400cc, the rate is currently 9p, but it goes up to 10p for journeys after 1st August."

So I can claim 7/47 of my 10ps per mile?

"You need sufficient VAT invoices to cover the VAT claimed."

Sales or Purchase Ledger?

Sorry if I'm a bit thick.

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By theaardvark
18th Jul 2007 16:29

Fuel Rates
The past and current accepted fuel rates are published by HMRC here:

http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

The mileage rate is deemed to be the VAT inclusive cost of the fuel per mile and you can claim VAT on this. As it is VAT inclusive you should claim 7/47 not 17.5%.

i.e. 100 miles x 10p x 7/47

You should have purchase invoices for fuel dated prior to the expenses claim showing at least the amount of VAT being claimed.

Regards,

Paul Taylor
Senior VAT Consultant
Dains

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