UK Mileage Allowance and VAT Scale Charge

Businesses in the UK can claim fuel or usage as an expense when using a private vehicle for business. There are three choices:

1. Record every business trip and reclaim the mileage allowance. You can also claim back a small amount of VAT from the business mileage. Make sure you have receipts (although HMRC accept that just about all fuel companies are VAT registered!). The amount of VAT you can reclaim varies depending on engine size. VAT 700/64. Here are the published fuel prices:

2. Claim back all the VAT and pay the scale charge. This is the most common method since it requires no mileage records to be kept, just a fixed amount to pay each quarter. If hardly any business miles are done, then method 1 may be more beneficial. Add up the total VAT and see if it is more than the scale charge.

3. Keep detailed records of all trips (date, from, to mileage, reason for trip) and figure out the business percentage. Only enter that percentage of fuel receipts and claim back only the same percentage of VAT.

Quentin Pain

Quentin Pain helps people thinking of starting a business and those already in business achieve success via his marketing company ProofMEDIA. He's also the creator of Accounting for Everyone, a published author. and founder of the International Copywriters Association. Visit to find out more.

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