Reclaiming VAT on mileage claims

Q: A number of my employees use their own vehicles for business purposes.  They submit a monthly expenses sheet to me and I then reimburse them using the HMRC approved mileage rates. Can I claim back any VAT on these amounts?

10th April 2014

A: Yes, but unfortunately you will not be entitled to claim back VAT on the full amount. Instead you can reclaim the VAT applicable to the fuel element of the mileage rate, and you need to ensure the employee submits a valid VAT receipt in support of the claim. 

The fuel element of the mileage rate currently varies between 9p and 24p, and depends on the size of the engine and the type of fuel being used.  These advisory fuel rates are available from HMRC.

If you would like further guidance on this area, please feel free to contact your local TaxAssist Accountant.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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