VAT on car expenses

Can VAT be claimed on car expenses where director personally owns a car or van

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I came across article on tax tips where it stated  employees (inc directors) that use their own car or van in a company.

The company can claim the VAT on Car Expenses like repairs, servicing etc where the invoice is billed and paid by the business.

The amount that can be claimed is the amount of mileage claimed for the financial year less the fuel element (based on HMRC advisory fuel rates) which will equal the maximum value allowable for the VAT on car expenses.  Is this correct ?

Would this be classed as a benefit in kind  ?

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the sea otter
By memyself-eye
03rd Apr 2019 16:32

I think you are confusing an employee claiming mileage with one running a company car, but as the question itself is so confused, who knows.

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By Matrix
03rd Apr 2019 16:41

The company can claim 2.5p per mile input VAT provided the employee has a VAT receipt for at least the amount claimed. I assume what you read means that the VAT receipts for servicing etc and not just fuel could be used to support the input VAT claim but I don’t know.

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By sash100
03rd Apr 2019 17:47

Apologies for the confusion, I printed out an example from the tax tip guide

If your employees have an allowance for their car servicing etc. bills in satisfaction of a claim for reimbursement of business travel, you can reclaim VAT to the extent that you have proof that it was paid. Usually this will be an invoice or VAT receipt. However, HMRC says this is not required in respect of the element of the employee’s claim which relates to fuel.
The amount you pay the employee must not exceed their mileage allowance claim.

Example - 2018/19

Mileage allowance claimed by employee 4,000 miles at 45p £1,800

Amount relating to fuel 4,000 miles at 11p (£440)

Amount to cover other costs £1,360

Therefore, the maximum value of service etc. bills which you can pay on behalf of the employee on which you can reclaim VAT is £1,360.

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