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Mileage allowances- flat rate up to 45p + claim the VAT element!

Don’t forget from 6th April 2011 the flat rate allowance for mileage incurred in private cars for business use was increased to 45p per mile from 40p for the first 10,000 business miles. The rate thereafter remains at 25p.

Please also note that legislation also enables you to reclaim the VAT element (or a reasonable approximation) on the amount attributable to fuel of mileage allowances paid to employees (or subcontractors). The fuel element must be close to the current advisory fuel rates. The latest rates can be accessed here.

Revenue & Customs require the following records to be kept:

  • The mileage travelled and whether business or private
  • The vehicle’s c.c.
  • Rate of mileage allowance
  • The amount of input tax claimed

VAT receipts should be provided by directors, business owners and staff, which must at least total the amount on which VAT is reclaimed each quarter. If you require more information please contact us.