Claiming back travel expenses query
Discussion
Just a couple of quick questions regarding claiming back of travel expenses.
Can the whole cost of any flights be claimed against business expenses if the flight was made with the primary purpose of business but I extended the stay to make a bit of a holiday out of it?
Do I need to keep any records for HMRC to claim the 45p mileage allowance when using my own car for business other than the record of where the trip was and the purpose. Records such as petrol receipts?
And if claiming mileage - can the VAT element of the fuel be claimed against VAT?
OK - that's 3 questions I guess.
Can the whole cost of any flights be claimed against business expenses if the flight was made with the primary purpose of business but I extended the stay to make a bit of a holiday out of it?
Do I need to keep any records for HMRC to claim the 45p mileage allowance when using my own car for business other than the record of where the trip was and the purpose. Records such as petrol receipts?
And if claiming mileage - can the VAT element of the fuel be claimed against VAT?
OK - that's 3 questions I guess.
Edited by Pistom on Monday 13th February 17:09
Pistom said:
Just a couple of quick questions regarding claiming back of travel expenses.
Can the whole cost of any flights be claimed against business expenses if the flight was made with the primary purpose of business but I extended the stay to make a bit of a holiday out of it?
Yes. Obviously this only applies to you in case you were thinking of bring your OH along as well (unless she is in someway connected to the business and the trip).Can the whole cost of any flights be claimed against business expenses if the flight was made with the primary purpose of business but I extended the stay to make a bit of a holiday out of it?
Pistom said:
Do I need to keep any records for HMRC to claim the 45p mileage allowance when using my own car for business other than the record of where the trip was and the purpose. Records such as petrol receipts?
And if claiming mileage - can the VAT element of the fuel be claimed against VAT?
Good question. As I understand it, you don't need a record of any trip made when claiming the 45p rate - although you need to be able to prove the trip was made and was a valid business trip should HMRC ever come to take a look. So diaries, emails confirming your visit and such like.And if claiming mileage - can the VAT element of the fuel be claimed against VAT?
You either claim the 45p - or - the VAT back. You can't do both so you need to choose which is best for you. You'll likely find that the 45p rate favours you the most and save a lot of faffing around.
StevieBee said:
Good question. As I understand it, you don't need a record of any trip made when claiming the 45p rate - although you need to be able to prove the trip was made and was a valid business trip should HMRC ever come to take a look. So diaries, emails confirming your visit and such like.
You either claim the 45p - or - the VAT back. You can't do both so you need to choose which is best for you. You'll likely find that the 45p rate favours you the most and save a lot of faffing around.
Thanks for the answers - you've made things clearer in my mind but I'm still not clear on VAT on the 45p. It would be the company which claims back the VAT - I would claim the 45p from the company so can the company not claim the VAT back on the fuel as part of the 45p would be VAT?You either claim the 45p - or - the VAT back. You can't do both so you need to choose which is best for you. You'll likely find that the 45p rate favours you the most and save a lot of faffing around.
Say my car does 50mpg on average and fuel was say £7.50/gal then £1.25 would be VAT out of each 50 miles claimed wouldn't it?
Edited by Pistom on Monday 13th February 18:28
Edited by Pistom on Monday 13th February 18:29
I have a limited company. That company is able to claim back the vat element of the mileage claim I submit as an expense and set the net off against profit for Corp tax purposes.
I meanwhile, claim 45p from my company (up to 10k miles etc) and supply sufficient fuel receipts to cover the claim (in reality all my fuel receipts). For good order my expense claim notes the date, start and end of journey and purpose.
I meanwhile, claim 45p from my company (up to 10k miles etc) and supply sufficient fuel receipts to cover the claim (in reality all my fuel receipts). For good order my expense claim notes the date, start and end of journey and purpose.
Edited by sleepezy on Tuesday 14th February 15:27
Pistom said:
Limited company which is VAT registered which pays me 45p per mile. I'm wondering if the company could claim the VAT back if I provide fuel receipts.
As I understand it, the fuel purchase is made by you as a private individual, on which you can't reclaim the VAT as a private individual. Your company pays you 45p per mile to cover your car costs, including i.e. insurance, maintenance, fuel, etc.
If your company buys the fuel, it could potentially recover the VAT, but there may be BIK or other taxes to pay by you for receiving that benefit. Also, I think that the HMRC mileage rate is a lot lower than 45p.
I am not an accountant, so I'm happy to be corrected.
Mandat said:
Also, I think that the HMRC mileage rate is a lot lower than 45p.
45p for the first 10,00 business miles. 24p per mile thereafter.If you fancy cycling to meetings, HMRC even permits 20p per mile cycled!
https://www.gov.uk/government/publications/rates-a...
I knew an IT contractor a few years ago working through his own company who went to the US for an industry conference.
'I put airfare and accommodation through the company, is that OK?' he asked his accountant.
'Yes, no problem'.
'To save money on the airfare I stayed in the US an extra 2 days after the event to include a Saturday night and took the opportunity to visit relatives, is that still OK.?
'Yes that's perfectly reasonable, you were there for the conference so what you do in your spare time is up to you'
'Anyway I didn't put the extra days hotel bill through the company because I was visiting relatives not working'.
'Oh bugger, that could mean it wasn't solely a business trip, you should have tried to claim the whole lot against tax'.
'I put airfare and accommodation through the company, is that OK?' he asked his accountant.
'Yes, no problem'.
'To save money on the airfare I stayed in the US an extra 2 days after the event to include a Saturday night and took the opportunity to visit relatives, is that still OK.?
'Yes that's perfectly reasonable, you were there for the conference so what you do in your spare time is up to you'
'Anyway I didn't put the extra days hotel bill through the company because I was visiting relatives not working'.
'Oh bugger, that could mean it wasn't solely a business trip, you should have tried to claim the whole lot against tax'.
sleepezy said:
I have a limited company. That company is able to claim back the vat element of the mileage claim I submit as an expense and set the net off against profit for Corp tax purposes.
I meanwhile, claim 45p from my company (up to 10k miles etc) and supply sufficient fuel receipts to cover the claim (in reality all my fuel receipts). For good order my expense claim notes the date, start and end of journey and purpose.
I meanwhile, claim 45p from my company (up to 10k miles etc) and supply sufficient fuel receipts to cover the claim (in reality all my fuel receipts). For good order my expense claim notes the date, start and end of journey and purpose.
If the director is paying for his own motoring and the company is reimbursing him his mileage, as long as the first 10,000 lies are paid at no higher than 45p per mile and everything over that at no higher than 25p per mile, then the director will not be charged a taxable Benefit in Kind on the money he receives from the company. If he claims at higher pence per mile rates, he will be taxed.
Whatever the company pays to go m, it can claim the full amount paid as a legitimate business expense.
The miles undertaken by the director SHOULD be recorded and kept by the company as part of the business records.
As far as VAT reclaims are concerned, the 45p/25p rules cover ALL motoring costs including costs which do not contain VAT such as insurance, road tax and MOT. Therefore you are not allowed make a global VAT claim based purely in 45p or25p.per mile. If there is a specific VAT claim that you want to make then this should be based on an original, legitimate VAT invoice from the supplier.
Strictly speaking, a limited company can only reclaim VAT on invoices addressed to the limited company. However, the small VAT invoice rules allow reduced disclosure on an invoice and they do not need to show the name of the customer. So HMRC will not disallow a VAT claim based on (as) a fuel invoice which was originally paid directly by the director.
Whatever the company pays to go m, it can claim the full amount paid as a legitimate business expense.
The miles undertaken by the director SHOULD be recorded and kept by the company as part of the business records.
As far as VAT reclaims are concerned, the 45p/25p rules cover ALL motoring costs including costs which do not contain VAT such as insurance, road tax and MOT. Therefore you are not allowed make a global VAT claim based purely in 45p or25p.per mile. If there is a specific VAT claim that you want to make then this should be based on an original, legitimate VAT invoice from the supplier.
Strictly speaking, a limited company can only reclaim VAT on invoices addressed to the limited company. However, the small VAT invoice rules allow reduced disclosure on an invoice and they do not need to show the name of the customer. So HMRC will not disallow a VAT claim based on (as) a fuel invoice which was originally paid directly by the director.
Eric Mc said:
.......
As far as VAT reclaims are concerned, the 45p/25p rules cover ALL motoring costs including costs which do not contain VAT such as insurance, road tax and MOT. Therefore you are not allowed make a global VAT claim based purely in 45p or25p.per mile. If there is a specific VAT claim that you want to make then this should be based on an original, legitimate VAT invoice from the supplier.
Strictly speaking, a limited company can only reclaim VAT on invoices addressed to the limited company. However, the small VAT invoice rules allow reduced disclosure on an invoice and they do not need to show the name of the customer. So HMRC will not disallow a VAT claim based on (as) a fuel invoice which was originally paid directly by the director.
Thank you.As far as VAT reclaims are concerned, the 45p/25p rules cover ALL motoring costs including costs which do not contain VAT such as insurance, road tax and MOT. Therefore you are not allowed make a global VAT claim based purely in 45p or25p.per mile. If there is a specific VAT claim that you want to make then this should be based on an original, legitimate VAT invoice from the supplier.
Strictly speaking, a limited company can only reclaim VAT on invoices addressed to the limited company. However, the small VAT invoice rules allow reduced disclosure on an invoice and they do not need to show the name of the customer. So HMRC will not disallow a VAT claim based on (as) a fuel invoice which was originally paid directly by the director.
So using my example above, if the car averages say 50mpg and fuel was £7.50/gal then the company could claim 2.5p back in VAT - £250 on 10000 miles in a year.
Eric Mc said:
...you are not allowed make a global VAT claim based purely in 45p or25p.per mile...
Yes apologies, I had set up my expense form years ago when I started the business and forgot the calculation I had used.I checked the spreadsheet after Eric posted this - in my case it's set up to claim the VAT element of 18p / mile (i.e. 3p) - I must have calculated this rate at some point in the dim and distant past when particularly bored - it really is making stuff all difference in the scheme of things
It's been a long time since I was PAYE for anything other than my own company but even back then I had to collect and submit fuel VAT receipts - not sure if there's now a dispensation under certain circumstances (?) or if your finance team are just doing it wrong or just not claiming the VAT.
Pistom said:
Thank you.
So using my example above, if the car averages say 50mpg and fuel was £7.50/gal then the company could claim 2.5p back in VAT - £250 on 10000 miles in a year.
As mentioned earlier, I believe the calculation that's accepted is the VAT on the AFR rate.So using my example above, if the car averages say 50mpg and fuel was £7.50/gal then the company could claim 2.5p back in VAT - £250 on 10000 miles in a year.
They get reviewed every quarter, but say it's a 2 litre diesel, the rate is 17p - so you can reclaim the VAT on that. For 10K miles it'd be £283. I recall seeing an example of this in accounting software.
It'd be more worthwhile on an over 2 litre petrol - £433.
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