I am a junior member of a business which has several types of vehicles in its fleet, and I have several questions regarding the reclaim of business mileage. I have my suspicions on the correct answers, but just thought I would post on here to gain a second opinion. The purpose of doing this is for personal interest and to back up my studies.
The company fleet includes:
Vehicles solely for business use - fully expensed by fuel cards - ALL VAT reclaimed
Company cars used for business/private employee use - Any business miles repaid to employee at 12.5p per mile - NO VAT reclaimed.
Employee private cars used for private employee use - Any business miles repaid to employee at 40p per mile - NO VAT reclaimed.
1. Has the same VAT reclaim method got to be used for ALL vehicles? I.e. can a scale rate be used for one 'class', a full fuel card reclaim for another class etc?
2. If they were to reclaim VAT on the business miles driven in company cars, would it simply be:
(£0.125p per mile x no. of miles) x 15%
3. If they were to reclaim VAT on the business miles driven in employee private cars, would it be as below:
(£0.12p per mile x no. of miles) x 15%
12p being the proportion of 40p relating to fuel (as per HMRC advisory fuel rates)
I realise that legislation requires valid VAT receipts to be submitted in conjunction with 3. Is this rebuttable?
And does it also apply to 2.?
Also, I find it strange that the receipts just need to be enough to cover (£0.12p per mile x no. of miles). Surely this could be any receipt for fuel? And for ANY trip?
Also, wouldn't any fuel that an employee buys have been at a normal price + VAT? Why are the receipts necessary?
You can either reclaim the input VAT as per the fuel card/receipt, or you can reclaim VAT on the fuel element of the mileage incurred. If the VAT is reclaimed on the fuel card/receipt, and there is private mileage then a fuel scale charge will need to be applied.
The fuel element that is applicable is dependant on the engine size of the vehicle.
For example: a vehicle with a petrol engine size of 1400cc or less could reclaim VAT on only 10p of the 40p reclaimed. A valid receipt would need to provided with the claim, and this receipt must be dated 'prior/during' to the journey being incurred.
