VAT on mileage

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Rachel
Rachel Registered Posts: 348 Dedicated contributor 🦉
Do many people claim the 2p(ish) VAT back on the 40p per mile mileage rate. The following link at the bottom states.

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

"VAT - Customs will also accept the figures in the table for VAT purposes though employers will need to retain receipts in line with current legislation."

So my understating is everytime a client pays for petrol if they collect the receipts just for admin purposes they can reclaim 2p(ish) VAT per business mile up to 10,000 miles.

Am I wrong?

Comments

  • payrollpro
    payrollpro Registered Posts: 427 Dedicated contributor 🦉
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    Rachel,

    No, your not wrong, i do the 2p a mile, work out the total and then check that I have sufficient VAT receipts to cover the amount I want to claim back. If I dont I ask my daughters if they have any, or anyone else I can think of, sorry I didn't mean to say that!

    The calculation is wrong and ought to be about 2.7p a mile now but the administration is so easy I can't be bothered changing.

    Payrollpro
  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
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    Thank you. I am only the bookkeeper for this client and his Accountant has told him that it isn't really acceptable/worth it and could lead to trouble with HMRC.

    Obviously, receipts are necessary even though not directly related.

    As I am just starting out and have only a few clients I had really started to doubt myself.

    Thanks again

    Rachel
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    We claim 3p per mile and have done for the last 12 years, several VAT inspections on varying clients and it has never come up as a problem.
  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
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    Thank you, I feel that I have been made to look stupid by even suggesting this. But hey ho smile and carry on.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    If you do a lot of mileage it can add up to a hundred or so a month or quarter - what's not to like?

    I claim the VAT on the mileage for VAT reg clients.

    What you need to look up is the Advisory Fuel Rates to get the right rate for the car and the period.
  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
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    It would be approx £200 a quarter. Is there any reason why claiming is not favourable? It is very easy for me to process, I am just wondering why his Accountants have advised against.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    Rachel wrote: »
    It would be approx £200 a quarter. Is there any reason why claiming is not favourable? It is very easy for me to process, I am just wondering why his Accountants have advised against.

    We have stopped claiming vat, but largely due to varying vat rules for different projects.

    Otherwise its well worth claiming, only takes one mileage expenses spreadsheet to be set up and that does the work each time.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    Rachel wrote: »
    It would be approx £200 a quarter. Is there any reason why claiming is not favourable? It is very easy for me to process, I am just wondering why his Accountants have advised against.

    No reason I can think of. It's a legitimate VAT claim.
    As long as the extra cost of the bookkeeping to do it isn't going to eat into the VAT reclaimed too much, I'd do it.
  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
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    Thank you all for your responses.

    Maybe the Accountants have their reasons. I might try and find out. I need to remember to this client I am just their bookkeeper and not waste my time on advice.

    Thanks again
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    I would wager laziness.

    I don't claim it for myself because I can't be bothered. I take a somewhat different approach for my clients!
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    I would wager laziness.

    I don't claim it for myself because I can't be bothered. I take a somewhat different approach for my clients!

    And auditors seem to think in '000's, and won't trouble themselves with pocket change :D
  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
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    This is what I don't understand. As I will be doing all the transactions and returns and I don't estimate it will take any longer. So there will be no action really by his "Accountants"

    I want to ask they why but I am a bit worried that they might black mark me but I will certainly do it for my tax clients unless advised not too.

    Thank you all
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