New VAT fuel rates apply to all journeys on or after 1 March 2011. They are as follows:
How do you use these new rates?
1. If you pay employees and directors a 40p per mile mileage then 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 16p = £80 x 20/120 (VAT fraction) = £13.33. The employee must provide you with VAT petrol receipts to support your VAT reclaim.
2. If you ask employees to reimburse you for the private miles they carry out in a company car you use these rates.
Earlier periods were as follows: