I hope someone can clear this up for me. I tried a search but couldn't find any recent posts regarding this. One of my clients wishes to start reclaiming the VAT on the fuel element of mileage allowance paid to employees for travel in their private cars. I have checked the HMRC advisory fuel rates and it says that this is only for Company cars...is this correct? If so, I'm assuming then that you can't reclaim the VAT element for miles done in their personal cars.
Yes, you can reclaim the VAT on the fuel element of the mileage allowance. I think the advisory fuel rates say that they are only for users of company cars because those users only receive those payments and cannot be paid normal amap's.
If you look at VAT notice 700/64, section 8.8, the confirmation is there. Don't forget that in order to reclaim the VAT, the employees also have to submit fuel receipts that cover the amount if the claim.
Thanks for the reply. I will take a look at VAT notice 700/64. I wish HMRC would make things less ambiguous sometimes! Yes, I know about the fuel receipts, I'm going to have fun getting them out of the client's employees!
So it looks like HMRC say the advisory fuel rates are for Company cars only, but in practice they let you use them in order to reclaim VAT on personal mileage payments. Another example of clarity by HMRC!
