VAT on Approved Mileage Claims / Advisory Fuel Rate

Hi
Ltd Co. - So I have totalled up my approved mileage for the last financial year, “paid” it from the Dir Loan Acc and tagged it to the “Approved Mileage Expenses” supplier at 0% VAT.
I have also calculated the VAT input tax based on the appropriate fuel rate(s), how do I claim this on a VAT return?

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If mileage expenses have been paid to employees (including Directors on payroll) for their business related journeys made in either their own vehicle or a company car, you can reclaim VAT on the fuel element of those mileage payments, although a company car, will in most cases include fuel used in private journeys, therefore the VAT fuel scale charge would also need to be taken into account.

EXAMPLE:

See the example below for claiming back the VAT for ‘Approved Mileage Expenses’:

CALCULATIONS:

The Advisory Fuel Rate of £0.16 is included in the Approved Mileage Rate of £0.45, therefore the Approved Mileage Rate needs to be reduced by £160.00 (1000 X £0.16) and then added back as gross to calculate the VAT amount, see the example below:

As you can see from the above example, the total amount claimed is still £450.00, with the input VAT being reclaimed.

VAT Receipt:

All employees must supply the employer with fuel receipts totalling at least £160.00 to allow the business to reclaim the VAT detailed in the example above.

Great, thanks for the comprehensive answer!

I’m glad we could help!