A cunning TAX question

[Let-Me-In]

Guys

I have just posed this question to my accountants.

If I drive my own car to work, then claim back mileage at 40p for the first 10K miles, can I also claim tax relief on the VAT I pay for my petrol? It is a business expense after all...???

[malvolio]

Guys

I have just posed this question to my accountants.

If I drive my own car to work, then claim back mileage at 40p for the first 10K miles, can I also claim tax relief on the VAT I pay for my petrol? It is a business expense after all...???

No, because the 40p expenses includes 1-2p for the VAT element... and which you should be recording as input tax if you aren't on FRS.

[DaveB]

Yes you can I belive, but you can only claim it on petrol used for business milage. It works about at about 1p per mile. You will also need tio keep the VAT receipts for all fuel purchases to support the claim.

It's far easier and more efficiant in tax terms to sign up for the Flat Rate Scheme instead. No need to keep track of VAT expenditure and it saves you money.