VAT rules on business mileage
VAT rules on business mileage
My current client has instructed all staff including contractors to pass onto them VAT receipts for fuel so that they can reclaim the VAT.
I currently contract to a large IT company in the UK. Yesterday a memo was sent to all staff in our department stating that following a change in VAT rules, they are now able to reclaim the VAT on fuel used on business. All staff have been instructed to submit VAT receipts for fuel related to business mileage.
I can understand the thinking about this for permanent staff, but I’m really not sure how legitimate this is for contract staff who have a business relationship (rather than employee) with the client via one or more third party companies (agency, ltd co, etc).
Is this legitimate?
Also, it occurs to me that for contractors who operate company cars, they may already be reclaiming the VAT on all fuel purchased for the car.
I have queried this with the client, but I get the impression that they tend to regard contractors as temporary staff and take little interest in the complexities of the legal relationships. Usual story, I guess, but I certainly don’t want to be party to any offence they commit as a result!
More: shout99.com