Advisory fuel rates from 1 March 2019

HMRC, VAT

Company-owned vehicles

HM Revenue and Customs have announced revised tax-free advisory fuel rates from 1 March 2019 which may be paid for business journeys in a car owned by the business.   Rates for the previous quarter is shown in brackets.

Engine size Petrol Diesel LPG
1,400 cc or less 11p (12p) 7p (8p)
1,600 cc or less 10p (10p)
1,401 cc to 2,000 cc 14p (15p)  8p (10p)
1,601 cc to 2,000 cc 11p (12p)
Over 2,000 cc 21p (22p) 13p (14p)  13p (15p)

These rates may be used in the following circumstances: –

  1. Where employers reimburse for business travel in company cars.
  2. Where employers provide fuel for company cars but employees are required to reimburse the cost of fuel for private use.

Input VAT claims on mileage paid for company cars or employee-owned vehicles

HM Revenue & Customs will accept the above figures for claiming input VAT on fuel for company cars, provided a VAT receipt is available to cover the cost of the fuel.  They will also accept the use of the above rates by the employer when calculating input VAT on the fuel element for employees using their own vehicles and claiming mileage under the tax-free approved mileage rates for business travel of 45p for the first 10,000 miles and 25p thereafter.

If you have not already done so, remember to update any spreadsheets you may use.

If you have any queries regarding the above or require any further information please do not hesitate to contact us.

Deposit/Cancellation Fees – new VAT treatment

New VAT treatment, hotel

Hoteliers are you ready!

From 1st March 2019 the treatment of cancellation fees is changing.  Previously where a customer has paid a deposit for a room and then subsequently cancelled, you had been allowed to reclaim the output VAT on this deposit, since there would no longer be a supply of accommodation and therefore this fell outside the scope of VAT.

Unfortunately, under the new rules, you will no longer be able to reclaim the VAT on the deposit as you will not be able to reclassify the receipt from a supply of accommodation to a compensation payment. It will be classified as an “unfulfilled supply”.

VAT can only be reclaimed where you actually refund the customer.

This new change will apply to deposits received before 1st March 2019 but cancelled after this date.