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How Many Actually Claim VAT On Mileage?

mentorkeithmentorkeith Feels At HomeRegistered Posts: 74
Is it worthwhile claiming VAT on mileage?

The reason I ask is because of all the time it takes to process everything (time costs money).

First, the fuel receipts have got to be carefully collected/stored (including time in obtaining them) and detailed on an expense sheet. The receipts then need analysing and adding up. Then they need to be scanned and uploaded to say Xero or simply filed away. By the time all this is done the costs will possibly outweigh the VAT claimable.

For example, as a standard fuel top up bill would be about £30 a time, there may be a lot of tiny bills to collect and store etc. At accountants charges of anything above £48 per hour = £4 or more for every 5 minutes, a bill of £30 (£5 VAT) would need processing in less than 4 minutes to make it worthwhile. For AAT MIP's the charge may be far less than £48 per hour so it may or may not be worthwhile for the client.

In practice, do accountants really advise clients that it is worthwhile or am I missing something?


  • mentorkeithmentorkeith Feels At Home Registered Posts: 74
    I forgot to mention that the above discussion was in relation to the 45p (up to 10,000 miles) and 25p per mile (in excess of 10,000 miles) mileage allowance on cars where fuel bills are not required to claim these amounts. Why bother about obtaining/processing these receipts if it is far faster to just process the mileage used and save time costs - probably higher than the VAT that could be claimed?
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    If you use something like Xero and the app I would estimate processing tie is around 1 minute max.
    Many do not bother but some do.
    I see you point but if clients can process themselves then thats a saving.

  • mentorkeithmentorkeith Feels At Home Registered Posts: 74
    Hi Burg

    Thanks for the feedback.

    I received a similar reply from someone else as follows:

    "I think whether the administration of reclaiming VAT outweighs the financial benefit depends on the time taken to make the claim and the amounts involved. We always give clients the option and most don’t claim the VAT element – and we let them know whether we think it’s worthwhile or not based on the potential VAT reclaim they might make. In most cases our advice is not to make the claim but occasionally if a client does significant mileage each month, and it only takes them 5 minutes to put the claim through, then it can be worthwhile – especially as they only need to do this once a quarter."

    Reading between the lines, if the client has an iphone and say an Xero app for snapping all the receipts and uploading immediately to Xero, then it could be (as you say) a 1 minute job per receipt for the accountant to process. I would say that if the client would like the VAT reclaimed, the full onus would be on them to upload all the receipts (as it would be too expensive to invoice them for collecting/uploading the receipts ourselves). If this is done in one go rather than in dribs/drabs it would work.
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