Content
Brave New World
Business Not Pleasure
Summertime Blues
All That Glitters...
Casting The Net
Trust Gordon?
It Ain't Over...
One In The Eye
Keep Your Nose Clean
Foreign Affairs
When Is A Car...
Don't Walk Away
Avoiding, The Issue
Brown Is Anti-PC
VAT's Up Doc?
Fuel's Gold
An Age-old Question?
That's Unfair!
Year In Year Out
How Hard To Try?
It's A Rip-Off!
Outlaws Win
Show Some Restraint
Not Our Problem
They Cannot Be Serious?
Merry-Go-Round
Pension Disappointments
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If you are VAT-registered, you can get VAT back on expenses - of course, you know that. If you buy petrol for business motoring, you claim back the tax. If your employees buy petrol, you can claim VAT on that too - even if you reimburse them by way of a mileage allowance. So if you pay 40p a mile, and the fuel is 12p of that, then you claim 1.787p (7/47 of 12p) out of the 40p as input tax. This has always seemed odd, because you have no VAT invoice - only an employee's expense claim. A few years ago the European Commission objected to it, and the European Court said it wouldn't do - there was nothing in the UK law to say that only business fuel could be claimed, and that was wrong. Customs have now changed the rules to restrict claims to business fuel, and to require a VAT invoice to back them up. What's still odd is that they just want a VAT invoice for "at least as much" as the mileage claim - so if you pay your employee for a 150 mile journey, the VAT is 7/47 of 12p x 150, and you can attach a VAT invoice for "a tank of petrol" to cover it. The amounts don't have to match exactly. It's also not necessary to have one invoice for each claim, as long as the total claimed is not more than the total invoices. Customs believe that there will be no significant change to the amounts that can be claimed by businesses, but a small change to the paperwork. In fact, the publicity for the change - which applied from 1 January 2006 - has made some people realise that they haven't been claiming all that they could, and Customs may actually find that claims go up. If you haven't claimed anything for mileage allowances in the past, you can still go back three years. If you want help with that, we will be happy to advise you. |
© Bayar Hughes & Co., 2010.