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Post Info TOPIC: Posting Business Mileage Claims for a VAT registered company


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Posting Business Mileage Claims for a VAT registered company


I've been looking at how business mileage claims have been posted for a VAT registered company, and came across some notes which suggested we should be calculating the "Approved Amount" claimable, and when posting separating out the VAT element of the expense.

So posting 2 lines for each transaction?

One for the non VAT element - should we be using T0 or T2? (I'm thinking it should show in the VAT return as the second element of the posting below will be?)

Another for the VAT element - T1 standard tax rate for the fuel component at HMRC's rate

Also, what records should we be keeping to back up these transactions?

Currently the director provides a Mileage and Expenses Claim Form each month with receipts for expenses, and notes for mileage being claimed, but no receipts for fuel?

Thanks so much!


Forum Moderator & Expert

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Posts: 11973

Hi Samantha,

no receipt, no claim.

The VAT on the receipts must cover at least the amount of VAT being reclaimed.

And yes, the VAT is against only the petrol element of the mileage allowance so, for example, at 45p per mile, (say) 14p may be Vatable (you would need to confirm the rate applicable to the directors car) and 31p non Vatable so in that example on 45p per mile (lets make the figures big enough to see) on a 100 mile journey the VAT reclaimable is 2.33. And yep, I've seen directors argue that they should be able to claim back 7.50 on that one! (thats why I have a white board in my office as I find walking them through it step by step helps them.... A word of warning though, apparently throwing white board rubbers at directors is frowned upon).

On the should it appear at all in the VAT return (T0 or T2) I don't use Sage but the principle is that the 31p element is compensation for the use of an employee's car rather than a payment for goods or services and as such I would argue that it should be T9. I'll leave that for one of the more Sage savvy people on here to respond to. My bit was more the principle of the VAT reclaimable.

All the best,




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.


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Posts: 2

Thank you Shaun,

That's really helpful.

Not sure they have fuel receipts for current claims so no VAT for now then.

Have seen a significant increase in mileage claimed last couple of months, 2200 miles claimed, hence looking at what has been done here in the past.

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