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VAT and mileage

23 July 2013
Issue: 4412 / Categories: Forum & Feedback , VAT

An employer reimburses the employees for the cost of fuel that has been used for business purposes. Employees do not always retain the supporting invoice for the purchase of fuel, and there is doubt as to whether VAT can be recovered

HMRC’s view in Notice 700/64 (July 2012) is that mileage claims by employees can have the underlying VAT recovered if the claim is supported by a VAT invoice.

Employees being what they are – despite nagging – they often do not provide a valid VAT invoice and claim a repayment of their expense using either a non-VAT receipt or sometimes without a receipt at all.

Following HMRC Notice 700/64 (and advice from the company providing our electronic expenses system) we have not been reclaiming VAT where there was no VAT receipt. However reading the HMRC’s internal instructions at VIT31200 about the absence of a valid VAT invoice I wondered if we have been overcautious in our approach.

In the light of VIT31200 do readers agree with the following comments? First we can reclaim VAT where there is a non-VAT receipt which...

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