Recovery of input tax on fuel costs

Road Fuel Scale Charge (RFSC) simplification.

It is common for a staff member to use a car for both business and private purposes (a staff member also covers sole proprietors and partners). Input tax is only recoverable in respect of the business use, so an apportionment is required. This may be done in the following ways.

• Apply the RFSC. This is a set figure per month which represents a disallowance for private use and is repaid to HMRC
• Keep detailed mileage records and only claim for the business element
• If a business pays a mileage allowance for exact business miles travelled it may reclaim input tax on that actual payment. HMRC publish approved Advisory Fuel Rates, which are used to calculate the payments and the recoverable VAT
• Do not make a claim at all (if business mileage is minimal or the administration outweighs the cost benefit)

Source Marcus Ward

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