Reclaim VAT on employee mileage claim

[Newchodge]

Another 'how to' request, please.

Director employee uses own car for business mileage and is paid at HMRC rate 45p. They provide VAT receipt for fuel puchased during mileage claim period.

I understand that input VAT can be claimed using the advisory fuel rate for the vehicle used, to give the amount claimable.

So how do I actually claim the input VAT? What do I put in the accounts softeare - usually the Director's expenses claims are journaled to their DLA.

 

[Ziggy2024]

You have to overwrite the VAT in the software so you have mileage calculated at AMAP rate (45p) and the VAT is calculated at AFR / 6 to give you the claimable amount.

Eg 1000 miles would be £450 to employee
VAT on a 2cv engine petrol would be 1000 x 24p / 6 = £40 claimable as input VAT.

 

[David Griffiths]

The easiest way is to post the claim split into two lines. Say the payment is for 500 miles and the approved rate for the fuel is 13,

Enter the first line described as mileage fuel rate 500 @13p. VAT standard rate
And the second line as mileage "base" rate (or whatever) 500 @32p No VAT.

You will vary the rates as the fuel rate goes up and down, but it will always come back to the total rate of 45p. Saves faffing about with manual calculations on the fuel element,

Most software will allow you to process the one payment split between two elements.

 

[Ziggy2024]

The easiest way is to post the claim split into two lines. Say the payment is for 500 miles and the approved rate for the fuel is 13,

Enter the first line described as mileage fuel rate 500 @13p. VAT standard rate
And the second line as mileage "base" rate (or whatever) 500 @32p No VAT.

You will vary the rates as the fuel rate goes up and down, but it will always come back to the total rate of 45p. Saves faffing about with manual calculations on the fuel element,

Most software will allow you to process the one payment split between two elements.

Good shout. I'm using a software at the moment that doesn't allow you to post gross so you have to work out the net and check the VAT so didn't even think to split it on 2 lines!

 

[Newchodge]

The easiest way is to post the claim split into two lines. Say the payment is for 500 miles and the approved rate for the fuel is 13,

Enter the first line described as mileage fuel rate 500 @13p. VAT standard rate
And the second line as mileage "base" rate (or whatever) 500 @32p No VAT.

You will vary the rates as the fuel rate goes up and down, but it will always come back to the total rate of 45p. Saves faffing about with manual calculations on the fuel element,

Most software will allow you to process the one payment split between two elements.

2 lines of a journal to the DLA, or do I have to pay the employee as a supplier?

 

[David Griffiths]

2 lines of a journal to the DLA, or do I have to pay the employee as a supplier?

Either - whatever suits you really.

 

[numbersrule]

2 lines of a journal to the DLA, or do I have to pay the employee as a supplier?

I normally use David Griffiths' 2 line split in a 'Spend Money' transaction, which is what Xero calls it, as opposed to a Supplier Bill, as such.
If you can tell me which software it is I might be able to tell you what your sofrware calls a 'Spend Money' transaction.

 

[Newchodge]

I normally use David Griffiths' 2 line split in a 'Spend Money' transaction, which is what Xero calls it, as opposed to a Supplier Bill, as such.
If you can tell me which software it is I might be able to tell you what your sofrware calls a 'Spend Money' transaction.

Thanks. It's Quickfile, I assume it is enter new purchase

 

[Newchodge]

I have issued a purchase "invoice" from the Director, showing Mileage claim and VAT. When I pay the Mileage claim to the Director it leaves an outstanding balance of VAT. How do I deal with the outstanding amount shown as due to be paid to the Director, please?

I suppose I should go on a book keeping course, but I don't have time!

 

[MyAccountantOnline]

I have issued a purchase "invoice" from the Director, showing Mileage claim and VAT. When I pay the Mileage claim to the Director it leaves an outstanding balance of VAT. How do I deal with the outstanding amount shown as due to be paid to the Director, please?

I suppose I should go on a book keeping course, but I don't have time!

I dont use Quickfile and someone else who does may be able to give you a better reply but when you enter the invoice you should be able to enter the invoice total and overwrite the VAT the system will calculate (ie 20%) with the actual amount recoverable. If you do that when its paid to the director it will clear the invoice total.

 

[Newchodge]

I dont use Quickfile and someone else who does may be able to give you a better reply but when you enter the invoice you should be able to enter the invoice total and overwrite the VAT the system will calculate (ie 20%) with the actual amount recoverable. If you do that when its paid to the director it will clear the invoice total.

Thanks Nicola. I have the invoice showing the claim as miles * 31p no VAT and miles * 14p with VAT. So I pay the Director miles * 45p, leaving a VAT amount showing as owing to the Director. Obviously it is not owed to the Director.

 

[MyAccountantOnline]

Thanks Nicola. I have the invoice showing the claim as miles * 31p no VAT and miles * 14p with VAT. So I pay the Director miles * 45p, leaving a VAT amount showing as owing to the Director. Obviously it is not owed to the Director.

If you can in Quickfile I'd enter the invoice total and then the VAT recoverable on the total on one line.

So if for example the claim is for 100 miles the invoice total will be £45 I suspect Quickfile will then show VAT recoverable of £7.50 and you'd overwrite that with the VAT actually recoverable.

 

[MyAccountantOnline]

Just done a bit of Googling - Quickfile has a rather odd way of recording this but this seems to explain how they do it

VAT on Approved Mileage Claims / Advisory Fuel Rate

If mileage expenses have been paid to employees (including Directors on payroll) for their business related journeys made in either their own vehicle or a company car, you can reclaim VAT on the fuel element of those mileage payments, although a company car, will in most cases include fuel used...

community.quickfile.co.uk

 

[Newchodge]

Just done a bit of Googling - Quickfile has a rather odd way of recording this but this seems to explain how they do it

VAT on Approved Mileage Claims / Advisory Fuel Rate

If mileage expenses have been paid to employees (including Directors on payroll) for their business related journeys made in either their own vehicle or a company car, you can reclaim VAT on the fuel element of those mileage payments, although a company car, will in most cases include fuel used...

community.quickfile.co.uk

Thanks Nicola, I didn't think to check how Quickfile does it, duh!

 

[Bobbo]

Thanks Nicola. I have the invoice showing the claim as miles * 31p no VAT and miles * 14p with VAT. So I pay the Director miles * 45p, leaving a VAT amount showing as owing to the Director. Obviously it is not owed to the Director.

You may already have solved it with the link provided by Nicola, but where if you're finding the VAT amount is being left outstanding then is it because you have been treating the "14p with VAT" as being 14p plus VAT? When actually the 14p is inclusive of VAT, i.e. is 11.67+VAT.