Business Mileage VAT Reclaim

Written by on September 11, 2008
Categories: Business Funding, Business Growth, Business People, Business Startup, Success Thinking

Posted by: Paul Stanford

 

Reclaiming VAT on your business mileage

You must have been living in a deep underground cave for the past year if you haven’t noticed the soaring cost of fuel. Cleary this is something that will hurt any of us that are running small businesses and need to run vehicles for whatever reason.

OK so this is nothing that you didn’t know already. But how many of you reclaim business mileage? Well if you do and you are VAT registered then did you also know that you are entitled to reclaim the VAT on the fuel element of the mileage allowance?

Let’s be clear this has nothing to do with fuel scale charges. How it works is something like this. Let’s say you claim 40 ppm for each business mile you do. A certain amount of this 40p is for the fuel element (the remainder being for servicing, road tax, insurance etc) and this varies depending upon the engine size and fuel type that your vehicle uses. For example for my car the fuel amount is 13p. Therefore I am able to reclaim approx. 2ppm of that as the VAT element (13/47*7=2).

OK this might not sound like much but if you are doing 10,000 miles per year and run a fleet of 20 company cars then the figures add up. Plus as one large retailer would put it “every little helps”

For further details see http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm and make sure you are getting your share of your VAT back on fuel.

 

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

 

 

 

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