Claiming VAT on fuel can be tricky, so there are a few options to look at:
Reclaim 100% of VAT – HMRC says you can reclaim 100% of the VAT incurred on fuel paid for business purposes. However, this requires you to prove that the fuel has been used solely for business purposes. Unless your business is a taxi firm this is virtually impossible.
Fuel scale charge – another way to reclaim 100% of VAT is to pay a VAT fuel scale charge. This is a way to tax private fuel use. Therefore when a car is for business and private use, VAT can be claimed on business trips if you are paying the appropriate fuel scale charge. This charge is based on CO2 emissions and car type. However, if mileage claims are low, it may actually work out more expensive to claim the VAT back.
Mileage log – VAT can be reclaimed on fuel by keeping a detailed mileage log. You can then work out how much of the VAT can be reclaimed.
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