VAT on mileage?

marine Registered Posts: 31 ? ? ?

Just want to check with you people what the rate is that you can claim vat on mileage sheets?

Currently claiming 40p a mile but are now VAT registered, is it still 12.5p per mile? and how does this get accounted for in the accounts?

Is it 40p -12.5p per mile on the profit & loss account?

Thanks in advance



  • Timmne
    Timmne Registered Posts: 37 ? ? ?
    Hi Tim, nice name ;)

    You need to check for the rate relevant to the car claiming. VAT is included in the fuel element so if your car's a 1500cc petrol car, you can reclaim 3/23 of 12p for every mile claimed for.

    In the accounts, for 100 miles claimed, you'd:

    Dr: motor expenses £38.43 (£40.00 less VAT)
    Dr: VAT £1.57 (£0.12 x 100 x 3/23)
    Cr: Bank £40.00

    Hope this helps

  • sheelagh
    sheelagh Registered Posts: 133 ? ? ?
    VAT on mileage

    I use the Advisory Fuel Rates - so it depends on the engine size and fuel type. I know these rates aren't specifically meant for claiming VAT on mileage, but they are a good guide, and I defy any VAT inspector to question my reasoning for using these rates.

    The 12.5p is the fuel element of the 40p/25p and you can claim VAT on the fuel element - so that's 12.5p/23 x 3 = 1.63p per mile VAT you can claim back.
    The bookkeeping entries are
    COST DR total mileage, less VAT amount.
    DR INPUT VAT - VAT amount

    You must make sure you have sufficient fuel receipts to demonstrate that the vehicle owner has actaully paid the VAT you are reclaiming.
    Also note that business owners who are sole traders and partnerships can't claim this VAT - it's only for employees and directors.
    And lastly, if the business has now exceeded the VAT threshold and it's not a Ltd Co, they will have to stop claiming the mileage allowance when they next change the vehicle used - see BIM47701. They can claim a proprtion of the running costs instead.
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