VAT on private mileage
September 30th, 2009
If you use your car for business use and you are VAT-registered, you can claim the VAT back on the business portion of your fuel.
There are four different methods for dealing with this:
- claim 100% of the VAT if there is NO private mileage;
- Use the HMRC scale charge payment for the private element, information available on http://www.hmrc.gov.uk/budget2009/bn69.pdf. This may not be appropriate if your annual mileage is low so you need to keep an eye on this to ensure you are not losing out;
- mileage method, keeping a record of mileage for business purposes (for cars and vans, that’s 40p for the first 10,000 miles, 25p per mile thereafter in the tax year);
- reclaim nothing - though a disclaimer to this effect will relate to all your vehicles, including commercial trucks etc.
There may be VAT periods when one or other method is more appropriate and you can change your method from one period to the next.
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The content of this article is for general information only. It should not be relied on and action which could affect your business or personal circumstances should not be taken without appropriate professional advice.
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