Mileage / Fuel

Question

i have limited company and when i drive to a meeting on the return journey i fill the car back to full using the company debit card. What's the best way to record this on sage as i know you cant claim VAT back on your EOY accounts. 
 thnks

CameronSmith · Answer

VAT is not the only consideration as if the company is paying for private fuel that is considered a taxable benefit. To prevent this, these fuel payments by your company should be treated as private transactions (e.g. to your directors loan account) with no VAT reclaimed. 
 For occasional company mileage using your private car, e.g. attending a mtg, the best option is to charge your limited company giving you 45p/mile from the business tax free (up to 10,000 miles/yr).

Pavol Rovensky · Answer

For VAT registered companies, the 45p/mile allows to deduct VAT on the element of the official fuel price, which is published by HMRC. The journal should therefore consist of 3 items - the official price, VAT paid, and the 'rest'. The driver needs to keep fuel invoices from the petrol station till, to prove that the recharged element of VAT or more has been paid in VAT. 
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 This doesn't constitute any accounting or legal advice, as I'm not an accountant, but a software engineer.

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Mileage / Fuel

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