Can I Claim VAT on Petrol

Yes, you can claim VAT on petrol.  However there are different methods of claiming back VAT on petrol, depending on your business circumstances and the amounts involved. Here are the main ways you can claim back VAT on petrol:

Claim all VAT on Private and Personal Petrol 

If you business provides its staff with ‘free’ fuel or a fuel card then it can reclaim all the VAT on the fuel purchased however it would need to repay a flat rate of VAT back to HMRC to reflect the private use element – this is known as the Fuel Scale Charge. The fuel scale charge is a flat rate deduction based on the CO2 emissions of the car. Find out how to work out the fuel scale charge HERE and how to disclose it on your VAT return.

Claim for VAT on Petrol used on Business Trips

If your business does not provide free fuel for its staff personal and private use or your staff reimburse your for their private fuel, you can opt to claim back VAT on petrol used for exact business trips only. In this case the driver needs to keep detailed records of the business trips they have undertaken – for example the date of trip, the client/customer they visited, the location, the mileage driven as well as submitting the VAT fuel receipts (as you would with any other VATable expense).

Claim Nothing

In some situations, claiming no VAT may be the best course of action.  In particular this may be suitable if your business mileage is very low compared to private mileage, where the fuel scale charge may mean it outweighs any business VAT claimed.

Tax Advice:

If you provide private fuel to several members of your team, then you must use the same method of accounting for VAT on fuel for all the members.  For example if you chose the fuel scale charge method for one, then it must be used for all the team.

Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.