VAT & BUSINESS CARS June 2022 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 2022 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 2022 are: Engine size
Petrol
LPG
Engine size
Diesel
1400cc or less
14p
9p
1600cc or less
13p
1401cc to 2000cc
17p
11p
1601cc to 2000cc
16p
Over 2000cc
25p
16p
Over 2000cc
19p
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 2022: 100 business miles in a 2.3 petrol engine car would give a calculation of: 100 x 25p x 1/6 = a VAT claim of £4.16 (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 2022 CO2 Band
CO2 Band
1 month period Scale charge
VAT element
Net
Box 1
Box 6
Scale charge
VAT element
Net
Box 1
Box 6
48.33
120 or less
174
29.00
14.50
72.50
125
262
92
15.33
76.67
130
98
16.33
81.67
135
104
17.33
86.67
110
18.33
91.67
150
116
19.33
155
122
20.33
160
127
21.17
165
133
22.17
170
139
175
145
180 185 190 195
120 or less
58
9.67
125
87
130 135 140 145
CO2 Band
3 month period
12 month period Scale charge
VAT element
Net
Box 1
Box 6
145.00
120 or less
700
116.67
583.33
43.67
218.33
125
1,048
174.67
873.33
279
46.50
232.50
130
1,121
186.83
934.17
296
49.33
246.67
135
1,188
198.00
990.00
140
314
52.33
261.67
140
1,261
210.17
1,050.83
145
332
55.33
276.67
145
1,329
221.50
1,107.50
96.67
150
349
58.17
290.83
150
1,401
233.50
1,167.50
101.67
155
367
61.17
305.83
155
1,469
244.83
1,224.17
105.83
160
385
64.17
320.83
160
1,542
257.00
1,285.00
110.83
165
402
67.00
335.00
165
1,609
268.17
1,340.83
23.17
115.83
170
419
69.83
349.17
170
1,682
280.33
1,401.67
24.17
120.83
175
437
72.83
364.17
175
1,749
291.50
1,457.50
151
25.17
125.83
180
454
75.67
378.33
180
1,822
303.67
1,518.33
156
26.00
130.00
185
472
78.67
393.33
185
1,889
314.83
1,574.17
163
27.17
135.83
190
490
81.67
408.33
190
1,962
327.00
1,635.00
169
28.17
140.83
195
507
84.50
422.50
195
2,030
338.33
1,691.67
200
174
29.00
145.00
200
525
87.50
437.50
200
2,102
350.33
1,751.67
205
180
30.00
150.00
205
543
90.50
452.50
205
2,170
361.67
1,808.33
210
185
30.83
154.17
210
559
93.17
465.83
210
2,242
373.67
1,868.33
215
192
32.00
160.00
215
577
96.17
480.83
215
2,310
385.00
1,925.00
220
198
33.00
165.00
220
595
99.17
495.83
220
2,383
397.17
1,985.83
169.17
225 or more
510.00
225 or more
2,450
408.33
2,041.67
225 or more
203
33.83
612
102.00
The scale charge for a particular vehicle is determined by its C02 emissions figure. Where the C02 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 C02 emissions figures, the lower of the two figures should be used. For cars which are too old to have a C02 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. The advisory electricity rate for fully electric cars is 5 pence per mile. Electricity is not a fuel for car fuel benefit purposes.
CONTRIBUTING TO YOUR SUCCESS If you need assistance with any of the above, or any other VAT issue please contact Richard Taylor or your usual Albert Goodman contact.
richard.taylor@albertgoodman.co.uk Facebook “f ” Logo
01823 286096
www.albertgoodman.co.uk
@AG_LLP
CMYK / .ai
Facebook “f ” Logo
CMYK / .ai