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Im in the UK. I drive my car on business insurance for work. I claim mileage with details of my car e.g. engine size. I've been told that in future I must submit fuel receipts even though I am not claiming the full fuel cost. I was told it was to prove to HMRC that tax was paid on the fuel. I don't understand this as a fuel receipt wouldn't prove which car the fuel was in or used for the claimed journey. Is this a legal requirement?

update I've been told it's "to enable the reclaim of VAT on such expenditure by the company"

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  • A fuel receipt would show that you paid at least enough tax for the fuel associated with your claimed miles, however, even if it's not possible to prove that the receipt concerns the actual fuel used for the actual trip.
    – phoog
    Jun 28, 2016 at 19:36
  • Erm I suppose but you could just use someone else's receipt, no proof that I paid for it
    – Enilorac
    Jun 28, 2016 at 19:38
  • What you need to do and what you must do, are not often things which correlate, especially when submitting to a bureaucracy.
    – user4657
    Nov 22, 2016 at 7:21

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I would say that your company is on very dodgy ground there if they try to claim VAT on the fuel. That's because they are not paying for the fuel. They most likely pay you a fixed mileage rate (45p per mile is normal), and they can fully deduct that as an expense. If they tried to deduct what they pay you, and deduct the VAT on the fuel, they should just hope that HMRC doesn't find out.

To make it more obvious why it would be illegal: If the company purchased a computer for £1,000 + 20% VAT = £1,200, they pay out £1,200, and they can deduct £200 VAT immediately, and £1,000 over a few years writing off the computer, so the total deduction is £1,200. In your case, apparently they want to deduct the money they paid you, plus VAT on the fuel which they are not paying, so the total deduction would be more than they paid. HMRC will be very, very unhappy to find this. Sorry, they will be very, very happy :-) For non-UK readers: HMRC = Her Majesty's Revenue and Customs; UK tax office.

What makes it worse is that the fuel is most likely used for business and for your private use, so they would be trying to reclaim VAT on fuel that wasn't used for business at all.

As far as you are concerned: You can safely give them your fuel bills if they ask for them and you don't mind; you're not their accountant and not responsible for how they handle their taxes. If you don't have the bills or don't want to hand them over, and they cause you trouble, then you might tell them the rest of this post. Myself I have never heard of anyone checking fuel bills.

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