Fuel receipts and expenses.

[PhranticPhred]

I do some work for an organisation and I am paid mileage, they now want receipts for fuel so they can claim the VAT. My total receipts for the month would around £120, I claim about £60. Is what they are doing legal and if not am I complicit in breaking the law?

 

[UK Contractor Accountant]

You did work as an employee or as a self employed person?

 

[UK Contractor Accountant]

Strictly, an employer’s claim to deduct VAT can only be supported by a valid VAT invoice if they have purchased the fuel from a VAT registered supplier. An employee is not a VAT-registered supplier. However, HMRC Notice 700/64 (July 2012) confirms that HMRC accept VAT invoices issued to an employee as satisfactory alternative evidence, as long as the employer has also retained the following records in relation to the employee’s mileage claim:

• the mileage traveled;
• whether the journey is both business and private;
• the cylinder capacity of the vehicle;
• the rate of mileage allowance; and
• the amount of input tax claimed.

 

[PhranticPhred]

You did work as an employee or as a self employed person?

It is voluntary work, for which I claim pence per mile.

 

[PhranticPhred]

Thank you for your reply.