Care is needed here as there are different engine size bandings for diesel engines. The current rates, applicable from 1
CHARTERED ACCOUNTANTS, TAX CONSULTANTS & FINANCIAL PLANNERS
VAT & BUSINESS CARS JUNE 2018
PRIVATE MILEAGE IN BUSINESS CARS Fuel Scale Charges are used to account for VAT on the private use of cars. The rates for VAT returns beginning on or after 1 May 2018 and the figures for the VAT due and net values for monthly, quarterly returns and annual returns are shown overleaf.
BUSINESS MILEAGE IN PRIVATE CARS Where employees are reimbursed for business mileage in their private cars input VAT can be reclaimed on the fuel element included in the mileage rate. The rates reflect fluctuations in fuel prices and are now to be reviewed quarterly on 1 March, 1 June, 1 September and 1 December. Care is needed here as there are different engine size bandings for diesel engines. The current rates, applicable from 1 June 2018 are: Engine size
Petrol
LPG
Engine size
Diesel
1400cc or less
11p
7p
1600cc or less
10p
1401cc to 2000cc
14p
9p
1601cc to 2000cc
11p
Over 2000cc
22p
14p
Over 2000cc
13p
Hybrid cars are treated as either petrol or diesel cars for this purpose. A claim is based on business miles x the appropriate rate x the VAT fraction currently in force. e.g. for a business journey undertaken on 2 June 2018: 100 business miles in a 2.3 petrol engine car would give a calculation of: 100 x 22p x 1/6 = a VAT claim of £3.67 (Based on the 20% standard rate of VAT) Please note that receipts (less detailed or full tax invoices) must be retained to support the VAT claimed.
CONTRACT HIRE AGREEMENTS VAT claims on lease hire charges are subject to a 50% restriction when the car is used for both business and private purposes. The VAT incurred on optional maintenance contracts is fully recoverable when these are separately described in the hire agreement and are genuinely optional.
VAT FUEL SCALE CHARGES For VAT accounting periods beginning on or after 1 May 2018 CO2 Band
CO2 Band
1 month period Scale charge
VAT Net element Box 1
CO2 Band
3 month period Scale charge
Box 6
VAT Net element Box 1
12 month period Scale charge
Box 6
VAT Net element Box 1
Box 6
120 or less
46
7.67
38.33
120 or less
140
23.33
116.67
120 or less
562
93.67
468.33
125
70
11.67
58.33
125
210
35.00
175.00
125
842
140.33
701.67
130
74
12.33
61.67
130
224
37.33
186.67
130
900
150.00
750.00
135
79
13.17
65.83
135
238
39.67
198.33
135
954
159.00
795.00
140
84
14.00
70.00
140
252
42.00
210.00
140
1,013
168.83
844.17
145
88
14.67
73.33
145
266
44.33
221.67
145
1,067
177.83
889.17
150
93
15.50
77.50
150
280
46.67
233.33
150
1,125
187.50
937.50
155
98
16.33
81.67
155
295
49.17
245.83
155
1,179
196.50
982.50
160
102
17.00
85.00
160
309
51.50
257.50
160
1,238
206.33
1,031.67
165
107
17.83
89.17
165
323
53.83
269.17
165
1,292
215.33
1,076.67
170
111
18.50
92.50
170
336
56.00
280.00
170
1,350
225.00
1,125.00
175
116
19.33
96.67
175
351
58.50
292.50
175
1,404
234.00
1,170.00
180
121
20.17
100.83
180
365
60.83
304.17
180
1,463
243.83
1,219.17
185
125
20.83
104.17
185
379
63.17
315.83
185
1,517
252.83
1,264.17
190
130
21.67
108.33
190
393
65.50
327.50
190
1,575
262.50
1,312.50
195
135
22.50
112.50
195
407
67.83
339.17
195
1,630
271.67
1,358.33
200
140
23.33
116.67
200
421
70.17
350.83
200
1,688
281.33
1,406.67
205
145
24.17
120.83
205
436
72.67
363.33
205
1,742
290.33
1,451.67
210
149
24.83
124.17
210
449
74.83
374.17
210
1,801
300.17
1,500.83
215
154
25.67
128.33
215
463
77.17
385.83
215
1,855
309.17
1,545.83
220
159
26.50
132.50
220
477
79.50
397.50
220
1,913
318.83
1,594.17
225 or more
163
27.17
135.83
225 or more
491
81.83
409.17
225 or more
1,967
327.83
1,639.17
The scale charge for a particular vehicle is determined by its CO2 emissions figure. Where the CO2 emissions figure of a vehicle is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used. For cars which are too old to have a CO2 emissions figure, you should identify the CO2 band based on engine size as follows: If its cylinder capacity is 1400cc or less, use CO2 band 140; If its cylinder capacity exceeds 1400cc but does not exceed 2,000cc, use CO2 band 175; If its cylinder capacity exceeds 2,000cc, use CO2 band 225 or above.
FURTHER ASSISTANCE If you need assistance with any of the above, or any other VAT issue please contact Andy Branson or your usual Albert Goodman contact. Andy is part of our Tax Consulting team, which provides high-level skills across all direct and indirect taxes. Tel: 01823 286096
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