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New VAT fuel rates – reclaim VAT on mileage

New VAT fuel rates apply to all journeys on or after 1 March 2013:

Engine size Petrol Diesel LPG
1400cc or less 15p 13p 10p
1401cc to 2000cc 18p 15p 12p
Over 2000cc 26p 18p 18p

 

Should you be reclaiming VAT on employee mileage?

I think you should now be asking employees and directors to obtain VAT receipts each time they fill up their petrol tanks to help support a VAT claim for input tax.

If you have ten employees each driving their own car for business journeys and each travelling, say, 4,000 business miles a year, there is a potential VAT claim of between £867 and £1,734 a year in input VAT.

In the past it was hardly worth the paperwork reclaiming VAT, but as petrol and diesel are now so expensive it is worth making the claim.

How do you use these new rates?  

  • If you pay employees and directors a 45p per mile mileage, you can use the above figures to calculate the amount of VAT that can be reclaimed on the petrol element of the mileage allowance.

For example, a claim for 500 miles in a petrol 1600 cc car would give a VAT reclaim of 500 x 18p = £90 x 20/120 (VAT fraction) = £15. The employee must provide you with VAT petrol receipts to support your VAT reclaim.

  • If you ask employees to reimburse you for the private miles they carry out in a company car you use these rates.

The amounts for earlier periods were:

Period from 1 December 2012 to 28 February 2013
Engine size Petrol Diesel LPG
1400cc or less 15p 12p 11p
1401cc to 2000cc 18p 15p 13p
Over 2000cc 26p 18p 18p

 

Period from 1 September 2012 to 30 November 2012
Engine size Petrol Diesel LPG
1400cc or less 15p 12p 10p
1401cc to 2000cc 18p 15p 13p
Over 2000cc 26p 18p 17p

 

Period from 1 June 2012 to 31 August 2012
Engine size Petrol Diesel LPG
1400cc or less 15p 12p 11p
1401cc to 2000cc 18p 15p 13p
Over 2000cc 26p 18p 19p

 

Period from 1 March 2012 to 31 May 2012
Engine size Petrol Diesel LPG
1400cc or less 15p 13p 10p
1401cc to 2000cc 18p 15p 12p
Over 2000cc 26p 19p 18p

 

Period from 1 December 2011 to 29 February 2012
Engine size Petrol Diesel LPG
1400cc or less 15p 12p 10p
1401cc to 2000cc 18p 15p 12p
Over 2000cc 26p 18p 18p

For earlier periods see the link below

http://www.hmrc.gov.uk/cars/advisory_fuel_archive.htm

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