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Post Info TOPIC: Fuel and VAT
gerry


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Fuel and VAT
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I apologise if this has already been covered before but I would like clarification if possible.

I have a client, limited company who is putting through mileage claims for 40p per mile for business trips.  A VAT man called him recently and said that he could claim the VAT on all of his fuel costs as well as the 40p per mile.

Is this the case? I thought you could either claim the actual cost method or the mileage rate method, I didn't realise that you could do a bit of both.

And is that right that you claim back the VAT even if the fuel is for private use?

He does not complete many business miles and therefore the mileage rate method would probably work out more beneficial to him.

Also thought it was strange that a VAT man called him offering him advice on what to claim back VAT wise, are they not busy!!!????

Can anybody please clarify the process. I always think I have it right then something else happens to confuse me.

Many thanks

Gerry

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Shamus


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Hi Gerry,

I answered this one some time back but can't for the life of me find in which thread.

basically you need VAT notice 700/64.

Have a read of the contents of this link especially around section 8.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000090&propertyType=document

This of course means that your client will need VAT receipts for the fuel at least up to the amount claimed.

cheers,

Shaun.

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
BackOfficeGroup


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I would agree with Shaun - to have a read of the notice, its quite indepth and this area seems to get everyone.

It does all depend on the vehicle itself, is it all 100% business, you can claim all the VAT but have to apply the scale charge or claim the VAT on the mileage but on a different scale dependant on the car cc etc....

If I have read it right, you are saying that he can claim both the fuel costs AND the 40p per mile - I would not agree with that - one or the other.

If an employee of a Ltd co uses their own private car, I would always use the 40p per mile claim on the company. If you can provide the fuel purchase receipt, then claim the VAT, if not then don't.

P

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Shamus


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Hi Phillip,

Seems strange to me as well but that's what's stated!

just had a look over on accounting web and found this :

http://www.accountingweb.co.uk/anyanswers/vat-element-mileage-rates

It's only for limited companies, and non VAT registered Sole Traders (As Sole traders over the VAT registration limit cannot claim mileage allowance).

For details of Sole traders and Mileage refer to the latest version of IR222.

cheers,

Shaun.


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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
gerry


Senior Member

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Thank you Guys.

Yes you did read me right, my client was told by the VAT man that he could claim both.

I will have a look at your links and the VAT notice when I have a clear head.

Thank you for your replies, its very much appreciated.

Gerry

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