Any tax experts… mileage claims

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  • Any tax experts… mileage claims
  • Premier Icon steveh
    Subscriber

    You don’t have to do either. Your employer might request receipts from you so they can reclaim the VAT however.

    Premier Icon chakaping
    Subscriber

    My accountant just wants me to keep a mileage log and claim the 40p per mile from the company.

    Same for my sole trader business, except I presume the log is just offset against my tax rather than me actually reclaiming it.

    Obviously I’m not a tax expert, but I was doing the accounts the other day and thought it be some use.

    daves mum
    Member

    See I’m being told that I have to put in fuel receipts that cover the entire cost of the claim. My argument is that if I did enough miles I could get into the situation where I can’t generate enough receipts to support any claim that I make, but my employer says that this is what the law requires.

    mrsflash
    Member

    I’ve only ever kept a log of mileage, never been asked to produce fuel receipts – because mileage isn’t just a fuel claim, it covers wear & tear etc as well.

    Premier Icon steveh
    Subscriber

    It’s what your employer wants to lower the cost to him by reclaiming the VAT. Totally differnt things. I’ve claimed mileage from various companies before and now as a contractor from my own and have never produced reciepts for fuel.

    daves mum
    Member

    Thats another part of my argument, surely it is only right to claim VAT back on the fuel used, not the entire cost? Otherwise you could claim VAT back on servicing, insurance, etc?

    daves mum
    Member

    Steveh – so essentially its just so that the company can reduce their VAT bill, is that what you are saying? If so, fair enough, but surely it isn’t a legal requirement on my part?

    Premier Icon steveh
    Subscriber

    That’s certainly as I understand it yes.

    I think the company can offset vat at 15% on the total paid to you as it is to cover all items not just fuel. So if the pay you 40p per mile they can reduce the cost to them to 34p per mile by reclaiming the VAT.

    It’s NOT a legal requirement for claiming the expense that’s for sure. It is a legal requirement to have the receipt/proof for it to be part of a AVT claim so that might be why they are saying it is a requirement.

    daves mum
    Member

    Ok, so in the situation whereby somebody was unable to provide receipts of enough value to match the value of the claim, (£160 claim, £30 fuel used), then that just limits the amount of VAT that the company can claim back?

    Premier Icon steveh
    Subscriber

    Pushing it now but again that’s my understanding of it all. I’ve spoken to my accountant a bit about this so there is some basis for my understanding.

    bensales
    Member

    Your employer is being a bit cheeky as someone else says by trying the use the full value of the fuel to reclaim the VAT.

    The 40p per mile isn’t just fuel. It’s to cover general running costs as well.

    The employer is supposed to be reimbursing the cost to you of running the vehicle, not just driving somewhere.

    I claim back 40p a mile, but my company only ask for a receipt for the real cost of the fuel. So a claim for 350 miles (a tankful in my car) will be for £140, but the receipt will be for 38ish quid. The difference is accepted to be to cover the running cost. My company prefer it if the reciept is for as high a value as possible because they can then claim back more VAT, but ultimately the cost comes out of their pocket.

    daves mum
    Member

    Ok, cheers for your help 🙂

    Premier Icon Shandy
    Subscriber

    Daves mum it sounds like they are trying to stiff you, or somebody in Accounts doesn’t know what they are on about. Mileage allowance is meant to represent a realistic cost for running your vehicle, fuel is a small percentage of that. All you are required to do is justify your mileage, the rest is their problem.

    Premier Icon Shandy
    Subscriber

    bensales that is exactly what i was trying to say, but better.

    daves mum
    Member

    Yeah it is a small company where everybody will do these little things to help out wherever possible, so I’m more than happy to do it, but I don’t want to get into the situation where I can’t put in mileage claims for all of the amount that I am allowed to claim for. It just looks like the company is (quite rightly) maximising the amount of VAT that they can claim back. This is okay when you do a small journey – a typical mileage claim for me would be 30 or so miles once every week or so, and this can be covered by a single receipt. It is the case where I do lots of miles in a short period of time where I need multiple receipts to support the claim as they are asking that concerns me.

    Premier Icon funkynick
    Subscriber

    I’d say there is a distinct difference between them asking for a reciept to cover the fuel you actually used for the trip, and them asking for fuel reciepts to cover the entire amount you will get paid.

    One is just claiming back the VAT on the fuel you paid for, the other sounds a little like a VAT fiddle to me!

    daves mum
    Member

    Can any tax experts on here point me in the direction of the correct procedure for mileage claims and receipts? When you put in a mileage claim, do you have to provide receipts to the value of the expense claim, or just a receipt to cover the actual fuel used. For example if I drive 400 miles @ 40p/litre, do I have to put in £160 of fuel receipts, or just enough to cover the actual fuel used, say £30.

    Cheers

    smiffy
    Member

    Deffo a fiddle. I’ve never given receipts. You’re claiming and allowance, not reimbursement of expenses. Your employer cannot claim back YOUR VAT, only VAT paid in legitamate expenses of the business.

    They give you a holiday allowance, do they want VAT receipts from your trip to claim back? That would be no differnet.

    Biffer
    Member

    As mentioned above – no legal requirement to provide receipts.
    My last company didn’t want anything at all but the current company do want receipts. Of course this only covers fuel nothing else. It currrently costs me about 10p per mile in fuel but that means nothing against the allowance.

    Sounds like somebody has got wires crossed somewhere over what is needed.

    daves mum
    Member

    Smiffy – point well made. In essence, by claiming VAT back on the full amount, they are claiming VAT back on expenses incurred by me, such as depreciation, servicing, and so on.

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