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Do HMRC advisory fuel rates apply to motorbikes?

For VAT purposes, can the 10p or 12p fuel rates be used for motorbikes?

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I use a car and a motorbike for work.  I'd never thought about claiming the VAT before until a client raised it.  I'd filed it under 'too much hassle for limited benefit'.  However, given that the mileage rate for my motorbike is so much lower than my car - 24p rather than 45p, it got me thinking whether I could maximise the benefit of using the motorbike. 

The advisory fuel rates for cars up to 1400cc (which my motorbike would be if I could claim it) are currently 10p per mile - which is a small proportion of the 45p for cars but, obviously, a more significant proportion of the motorbike rate.  Given that I get barely more for using my motorbike for work than I get for using my pedal cycle, I am more inclined to maximise anything I can as my motorbike definitely costs more to maintain than my bicycle - chiefly in fuel!  I accept that I am probably in a relatively small minority of people who actually uses all three modes of transport for work - and tracks the mileage on each.

Or is the benefit in having a smile on my face when I'm making progress through the traffic and having the gently warming rays on my back (or the snow)?

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By Truthsayer
07th Apr 2021 11:45

That rate is for CARS up to 1400cc, not any vehicle. For a motorcycle you would need to work out your own rate, based on the proportion of the 24p per mile rate that is for fuel and other VATable expenses.

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Replying to Truthsayer:
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By bendybod
07th Apr 2021 13:26

Thanks. Given the minimal cost of taxing and insuring a motorbike, probably the vast majority is fuel or tyres, which I would buy from a VAT registered business.

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By Hugo Fair
07th Apr 2021 15:28

"The advisory fuel rates for cars up to 1400cc .. are currently 10p per mile"
However, the advisory fuel rates "only apply to employees using a company car" - https://www.gov.uk/guidance/advisory-fuel-rates - so doesn't apply to you twice over (not a company vehicle and not a car).

The Approved Mileage rates, as you say, do include a rate for motorbikes (irrespective of size or mileage in year) of 24p per (business) mile. This rate is meant to cover the running costs of the employee providing the vehicle in a road-worthy state - such as maintenance, MoT, insurance and (I believe) depreciation (as well as of course fuel). An individual is entitled to claim a higher rate if prepared/able to document the evidence for that higher rate.

So I don't think you have any alternative options other than those you already enjoy ... unless your company provides you with the motorbike, with all the obvious tax consequences (and no certainty as to any Advisory Fuel rate that would then apply).

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By paulwakefield1
08th Apr 2021 08:46

I can't see any particular reason why VAT on the fuel element of the AMAP cannot be reclaimed by the business subject to holding the relevant receipts. But, in the absence of the guidance of advisory fuel rates, you would need evidence for the basis of claim. HMRC themselves suggest RAC or AA rates but I am not sure such things still exist (although I have not done a detailed search). Presumably detailed fuel and mileage records would give an accurate mpg and the costs could be worked out per mile - for most motorcycles (unless thrashing a particulalry sporty bike or running a Harley), it's going to come out at about 10 miles per litre or something like 2p VAT per mile.

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Replying to paulwakefield1:
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By bendybod
08th Apr 2021 10:28

Yeah, 10 miles per litre sounds about right - which would be about 12p given that petrol is about 125.9 at the moment. So the 10p sounds reasonable. I do sufficient miles that it is probably worth thinking about - especially as the longer the journey, the more likely I am to take the motorbike.

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By [email protected]
12th Apr 2021 12:10

Although they don't publish it HMRC do accept the advisory rates (I think not publishing the fact comes under "Cant be bothered" rather than any official dictate)
however: you do need receipts and you need ot use the rate in force at the time of the journey.
This was told to me by a VAT inspector during a VAT inspection, we were subsequently able to reclaim VAT for 5 sales staff doing about 30k miles each. They all had car allowances instead of company cars BTW.
And - as they had personal cars the said staff were able to claim tax relief on the difference between the mileage we repaid and the official rate... which was useful as it gave them incentive to provied the appropraite records.

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Replying to [email protected]:
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By Hugo Fair
12th Apr 2021 13:25

1. Your 'advice' was given to you "by a VAT inspector" ... whereas OP was asking about alternative methods of claiming a mileage benefit (with the unstated inference that this would be free of PAYE tax). Strange though it may seem for an HMRC employee, a VAT inspector usually restricts observations to VAT issues (not all the other myriad taxes that fall under the purview of HMRC).

2. It's not clear but are you confusing Advisory fuel rates with Approved Mileage rates? When you say "staff were able to claim tax relief on the difference between the mileage we repaid and the official rate" ... do you really mean you paid less than the Advisory fuel rates (which would frankly be mean)? Or do you mean you paid less than the AMAP rate (which is not uncommon)?

Basically, I don't mean to be rude but I don't follow the relevance of your "HMRC do accept the advisory rates" comment - as there is no such rate for motorbikes.

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Replying to Hugo Fair:
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By paulwakefield1
12th Apr 2021 13:41

My understanding of the OP was whether the advisory car fuel rates could be used as a basis for reclaiming VAT on fuel for a motorcycle. I don't think they can but that is not to preclude the ability for the business to recover VAT on business mileage fuel included within the motorcycle AMAP subject to proper records and receipts.

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Replying to paulwakefield1:
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By Hugo Fair
12th Apr 2021 13:58

OK ... 100% agree with all that.
Whether due to the twists & turns of the thread or to my brain missing lunch, I got confused by point being made in previous posting.

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Replying to Hugo Fair:
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By [email protected]
24th May 2022 13:46

Hi Hugo,

I've just re-visited this so apologies for not responding sooner
To Clarify:
RE VAT on Fuel: I am talking about the Advisory Fuel rate. and was advised to me by a VAT inspector at a VAT inspection. It has since been corroborated at another VAT inspection for another company. So, as long as you are using the advisory rates, a VAT inspector does accept them*
(*general practice seems to be to accept them, although official guidance is silent. only referring to company cars...)

RE the AMAP Rates: The company I was working for at the time was paying approx. the advisory fuel rates. on the basis that the employeees had car allowances which therefore covered the non fuel element. The same company also had a PAYE inspection some time previously, which highlighted the problem (amongst others) of inadequate records for the mileage claims. (Thankfully before my tenure - I just had the unenviable task of sorting it out!) on which vat had been claimed as the previous incumbent had just carried on as they had done while the sales people had company cars.

The VAT inspector did indeed, tell me about the mileage rate. For which I was a) mildly suprised, because, as you say, they don't generally comment on other taxes. b) thankful, as that gave me a carrot to work with. I did check out his advice before I spoke to the staff mind!

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