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