Claim of Input VAT on mileage allowance claims...

Most business claim mileage when a director/employee uses their own private vehicle for business purposes. However, most businesses (unless using the flat rate scheme) do not realise that they can claim Input VAT on the petrol element of the mileage allowance using the upto date advisory fuel rates. Below is a link to the latest advisory fuel rates from 1st June 2010 onwards.

http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

For example:-
If you drove 1,000 miles on business a car with an engine size of over 2000cc the petrol element of your mileage allowance claim is:
1000 miles @ 21p = £210 which is split
VAT Element is £210 x 7/47 = £31.28
Net Purchase is £178.72

To ensure that you make the claim for Input VAT, the business should keep the petrol receipts that cover the business mileage. They should be dated before the mileage claim is made and at least cover the cost of fuel for business journeys.

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