Just as I am indebted to my 11 year-old son Peter for the previous post, so I am indebted to my colleague Sharon Nash for the basis of this material. 

PERSONAL VEHICLE

If you use your personal vehicle for business purposes you are allowed to claim mileage under the fixed profit car mileage scheme as follows:-

 FIRST 10,000 miles at 45p per mile

SUBSEQUENT MILEAGE at 25p per mile

PASSENGER RATE you are entitled to an additional 5p per mile for carrying a passenger with you on a business trip (provided the attendance of the passenger is required for business purposes).

If you are not reclaiming the full amount allowed by HMRC as set out above then you can submit a claim to HMRC for the difference to be allowed against your income tax liability.

VAT TREATMENT 

When submitting your expenses claim you quantify the full amount of the claim which is paid to you by the business.  You should identify the VAT element of the claim by reference to the following tables:

 

Engine size Petrol
   
1400 cc or less 2.5p per mile
1401 to 2000 cc 3p per mile
Over 2000 cc 4 1/3p per mile

 

Engine size Liquefied petroleum gas
   
1400 cc or less 1 2/3p per mile
1401 to 2000 cc 2p per mile
Over 2000 cc 3p per mile

 

Engine size Diesel
   
1600 cc or less 2 1/6p per mile
1601 to 2000 cc 2.5p per mile
Over 2000 cc 3 1/6p per mile

 

These rates are 1/6 of the gross advisory fuel rates, effective from 1 March 2012 and reviewed on a quarterly basis. See below as to how to access details of the updated rates. The percentage of 1/6 applies to VAT inclusive figures with a VAT rate of 20%, and would vary if the VAT rate were to change.

 Your VAT Return should show the VAT element, which is allowable input VAT. The remaining 5/6 is part of total inputs. 

COMPANY CAR

If you use a company car and the company does not provide you with fuel for the vehicle then the reclaimable mileage rates are:- 

Engine size Petrol Liquefied petroleum gas
     
1400 cc or less 15p 10p
1401 to 2000 cc 18p 12p
Over 2000 cc 26p 18p

 

Engine size Diesel
   
1600 cc or less 13p
1601 to 2000 cc 15p
Over 2000 cc 19p

 Petrol hybrid cars are treated as petrol cars for this purpose.

 The rates are reviewed 4 times a year, and any changes will take effect at the beginning of March, June, September or December. The above figures are correct as of 1 March 2012. The latest rates can be checked at www.hmrc.gov.uk/cars/advisory_fuel_current.htm

VAT TREATMENT

Again you are entitled to reclaim the VAT element using the same calculation as above.

 

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