Mileage question

[craig1]

A quick question that hopefully has an easy answer.

The "something dodgy is going on" alarm bell rang in my head. I've been told that if I want to claim mileage that I need to both send in my mileage claim and also a VAT receipt for the fuel spent to at least the value of the mileage claim.

Now, surely there's something dodgy about that... my mileage isn't to just cover fuel, it's meant to cover everything else involved in running a car. If I'm giving them a high value VAT receipt then they're getting VAT back for fuel that isn't anything to do with my business travel.

What's the impact on me/my company for this, if any?

[Clare@InTouch]

The receipt is just to justify the spend, not for them to claim back the VAT thereon. There is a small VAT element to mileage, but it's calculated based on the deemed fuel element of the allowance not the full 45p.

[craig1]

Thanks Clare but I'm querying why they need a receipt for the full mileage value, e.g. if I claim £100 then I need at least £100 of VAT receipts. I don't think they get what I'm on about when I say that I'm not spending that much on fuel but will be claiming it in expenses against the agreed mileage rate. It might just be that I'm dealing with someone quite "special" and that there may be another answer from them.

[craig1]

Just had it confirmed by someone senior that if I want to claim £100 then I need £100 in VAT receipts. Hmmm....

[jmo21]

who is "they"?

a client co who have agreed to pay mileage as part of your contract?

either way, you are correct, it doesn't make much sense.

[TheFaQQer]

Just had it confirmed by someone senior that if I want to claim £100 then I need £100 in VAT receipts. Hmmm....

Sounds like that's the policy of your employer.

If they only refund what you have a receipt for, then you can still put the difference on your SA tax return.

[craig1]

Sounds like that's the policy of your employer.

If they only refund what you have a receipt for, then you can still put the difference on your SA tax return.

I have no employer

Contract says mileage is billable at full HMRC allowance rates. For me, it's none of their business about VAT on a bill. I bill my company for mileage, without providing VAT receipts, that's recharged to the client as part of my normal weekly invoices, they then can reclaim the VAT on my invoices.

[Joeman]

Just had it confirmed by someone senior that if I want to claim £100 then I need £100 in VAT receipts. Hmmm....

thats silly, the mileage is supposed to cover all running costs of the vehicle, not just fuel... if they wont accept that, then expense them for taxis instead

[TheFaQQer]

I have no employer

Contract says mileage is billable at full HMRC allowance rates. For me, it's none of their business about VAT on a bill. I bill my company for mileage, without providing VAT receipts, that's recharged to the client as part of my normal weekly invoices, they then can reclaim the VAT on my invoices.

OK, so we've answered who "they" are.....

Your contract says mileage is billable to HMRC rates. Therefore, you bill mileage at HMRC rates.

On your invoice, include a line for "expenses - mileage Z miles at 45p per mile = £ZZ.ZZ"

Then add VAT to the total and send that in to whoever your contract is with.

[craig1]

OK, so we've answered who "they" are.....

Your contract says mileage is billable to HMRC rates. Therefore, you bill mileage at HMRC rates.

On your invoice, include a line for "expenses - mileage Z miles at 45p per mile = £ZZ.ZZ"

Then add VAT to the total and send that in to whoever your contract is with.

Yep, that's what I always do and always will. It's just the request for VAT receipts to "prove" expenditure to the full value of the claim that seems daft to me. Normally if a client asks for VAT receipts to prove expenditure, I send copies annotated to say that VAT already reclaimed by my company, in this case there are no VAT receipts as I don't provide them to my company on purely mileage expense claims.