Can I claim VAT?

[ywtaxcar]

Hi I have a few friends at work who tell me they have claimed VAT on the form p87.
We have a company car, the car is a hire car from lex and we pay a contribution, the insurance is covered.
We buy all the fuel and make a claim for the return of the money on only the company miles. The company pay us 15 p per mile.
The colleague tells me that Tax relief could be claimed on the difference between the 15p and government recommended 40 p per mile guideline amount so approx 20% of 25p for first 10k miles and 15p thereafter?
please can you guys help me with understanding this better and possibly point me to some specialist advice,
i have done 30000 miles waiting to claim if possible for a year about to drop off the back end of 6 years at the end of this month!
Thanks
ywtaxcar

[pjclar02]

Hello there

I think your friends may have misled you - you cannot claim VAT on form P87. You may be able to claim an income tax deduction, however based on the information provided this is probably unlikely.

As the company owns the vehicle, you would not be entitled to 40p per mile as the 40p rate is designed to cover insurance, tax, wear and tear etc. These are not costs to you personally as you do not own the car, and therefore you cannot make this income tax claim.

The 15p per mile that your employer reimburses you is for the actual cost per mile of your petrol / diesel, which is the only cost you incur in relation to the vehicle. HMRC have "advisory fuel rates" which represent their take on how much fuel will cost per mile in certain cars. The current rates can be found at the below link:

http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

You will see that the current advisory rate for a petrol car with over a 2000cc engine is 26p per mile. Therefore, if you drive such a car then you could claim the difference between the 26p advisory rate and the 15p actually reimbursed (i.e. 9p per mile).

Note that the advisory rates change quarterly, so you would nee to find the applicable rate for each quarter that you were reimbursed and perform the calculation.

I hope this helps