fuel receipts for tax purposes

[sandhu40]

I am a RGI about to form a limited company.

Do you have to keep proof of the business mileage that you have done? ie fuel receipts? I have been told that you dont have to keep receipts by one person and another person has told me that I do need to keep the receipts. They were both accountants. I would think that you would have to record mileage but what is there to stop people claiming too much?

Also, if I rent or lease a van, what mileage can I claim? I have been told £0.13 per mile and also the rent or lease cost can be offset. Is that 13p per mile whatever mileage I cover? It seems too little for a medium sized van doing local mileage.

Thanks for the help.

 

[Shytalkz]

If it's a privately-owned vehicle and you're claiming mileage from the company as an expense, then you need to keep records to claim in accordance with IR rates (can't remember what they are).

If it's a company-owned vehicle and you are stating that you do not do any private mileage in it, then you need to keep records to prove the mileage and also the fuel used.

If it's the latter and you do both private and company mileage, then you get taxed on the van as a benefit in kind (BIK) and also a fuel surcharge, so mileage records are less important, unless you are claiming that you put fuel in from your own pocket to cover private use. The arrangement is/was slightly different from company cars, in terms of amounts payable; the van used to be £50 a month, I think for BIK for both use of van and fuel. Not sure what it is now though.

 

[dingdongdan]

There is another matter to consider when looking at fuel receipts, relevent if the company is VAT registered. The above is quite correct but look at the situation if the van is privately owned and mileage allowances are claimed

Employee: claim 40p per mile (first 10K miles), company pays over this to employee

Company: can claim the input VAT on the fuel element of the 40p per mile (although they don't have to), but now (it used to not be the case and this is crazy in my opinion) they have to produce VAT receipts for this input VAT. The calculation is, for instance, on 1000 miles:

1000 (miles) x 12p (fuel element of 40p) x 7/47 (VAT fraction) = £17.87

Why do I think this is daft? You have to produce VAT receipts for this fuel used but they (HMRC), and you most of the time, don't know and can't prove what receipts relate to private and business fuel. So you pop all your fuel receipts in a shoe box, when you get your VAT investigated and they ask you to provide VAT receipts for the business mileage (although I'll give you my left nut if they would bother) then stick your hand in the shoe box, wiggle it around (tombola style) and pull a receipt out, and you have your proof. They go away happy you didn't screw them out of 17 quid.

It's a bit more amusing if you have 100 staff all claiming business mileage (really big shoebox needed) and you claim the VAT portion, you can't even prove which receipts belong to which employee but they still go away happy!

 

[Shytalkz]

Another shining example of the complete bollix of VAT and tax. As I work from home and don't use my car for private mileage (...!), I had to write myself a letter from the company, on headed paper, saying that I wasn't to use my car for private mileage, to avoid fuel surcharge and CCT .

 

[^woody^]

Why is there a poll for PL insurance when the question is about fuel

 

[wms]

PL and combined insurance this year £5900.00 no claims.they tried to get £11500 told them to take a hike thats for all employees all risk cover building plumbing glazing gas etc etc.then vehicle insurance on top don't know why i bother at times so i would love to pay any of the premiums quoted in the poll at the top. fuel we save every receipt and have a fuel account,no private milage and all guys have to fill in a milage sheet that way an audit trail is created and you can prove that you are taking all reasonable steps to prevent abuse.

 

[sterod1971]

best advice ever given to me was keep all recipts.................you will have to prove to the tax man that you bought the stuff eventually!
Steve the Gas