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Can You Claim VAT Back on Fuel Without a Receipt: Business Guide 2023

Updated 25th August 2023.

As a business owner, you may often find yourself needing to reclaim VAT on purchases for fuel made for your company. 

How to Claim VAT Back on Fuel for your Business?

1. Keep a detailed mileage log of all business mileage and journeys made as part of the business. By tracking what mileage expenses are used for business, you can calculate how much VAT can be claimed back. 
2. Another way is to reclaim 100% of the VAT incurred on fuel bought for business purposes, but this requires proving that the fuel has been used solely for business purposes, which is almost impossible unless the business is a commercial transport firm

HMRC provides Advisory Fuel Rates to make calculation and record keeping easier. 

In order to do so successfully, it's crucial to have the appropriate documentary evidence as per HMRC's guidelines. 

This ensures that your claims are valid and in compliance with the necessary regulations.

There are instances where businesses have faced criticism from the Court of Appeal for not possessing the standard documents required for VAT reclamation. 

To prevent such issues, it's essential to maintain accurate records, including fuel and petrol receipts, as well as mileage logs and records. 

Utilising tools such as fuel cards and adhering to advisory fuel rates can also greatly assist in your efforts to reclaim VAT back on fuel in a smooth and efficient manner.

What Proof is Required for VAT Reclaim? Answer: The Correct Documentation

When working on your VAT return and aiming to reclaim VAT, it's essential to possess the proper documentation as per HMRC guidelines to support your claim. Here are some examples provided by the HMRC:

• Accurate VAT invoices displaying all legally required information
• Self-billed invoices including all necessary details, but only if approved by HMRC
• Invoices with fewer details for supplies valued at £250 or less, tax-inclusive
• Authenticated receipts for stage payments in the construction industry

Keep in mind that less detailed tax invoices can also come in the form of retail receipts from petrol stations or high street stores. 

Also, you may reclaim up to £25 in VAT on purchases without a receipt if the transaction was made using a coin-operated machine and you can prove the supplier is VAT registered. This will help you ensure a successful VAT reclaim without any complications.

Whose Name is on the Invoice ? Receipt?

Contrary to popular belief, it is not necessary for an invoice or receipt to be in the name of the business reclaiming the VAT. In reality, only the VAT-registered business receiving the supply can claim the VAT back. If a purchase is made for your business but the invoice shows someone else's details, such as an employee's, you are still entitled to reclaim the VAT. However, it is not acceptable to reclaim VAT for a purchase made for you personally, simply by passing it through your business.

ExpenseOnDemand Tip: To avoid potential questioning from HMRC inspectors, it is always preferable to have invoices addressed to your business whenever possible.

If you require assistance with VAT inspections, disputes, or payments, consulting a professional can be helpful in navigating these complex matters. 

Remember to keep track of your business expenses and ensure to claim VAT for purchases such as commercial vehicles and motoring expenses when they are genuinely for your business.

No Invoice?

While it's important to have proper documentation for your VAT claims, there are instances where invoices or receipts might not be available. In such cases, HMRC may accept a claim for VAT if you can demonstrate the following:

• The purchase took place, supported by alternative documentary evidence
• The purchase was for your business
• You made reasonable checks about the supplier
• There was a commercial arrangement between you and the supplier

Proof that VAT was paid

When claiming VAT, it's essential to demonstrate that VAT was charged on the supply and that you have paid it. 

To provide adequate proof, consider using alternative documentary evidence such as a bank statement that can be linked to the supplier. This evidence should also show that the goods or services were used for your business purposes.

ExpenseOnDemand Tip: The level of evidence required by HMRC inspectors might vary depending on the amount you're claiming. For small VAT claims (£20 or £30), there may be less scrutiny. However, for larger sums, it's advisable to comply with HMRC's criteria as closely as possible.

It's always best to obtain a full VAT invoice when possible, as this simplifies the process with HMRC. 

Keep in mind that the invoice can be in someone else's name, such as an employee's, as long as it's evident that the purchase was made for your business. 

If you can't obtain a VAT invoice, HMRC should properly examine other forms of evidence, like supplier statements.

By providing the appropriate proof, such as bank statements and supplier statements, you increase your chances of successfully reclaiming VAT without any complications. 

Always ensure that your documentation is clear and accurate to support your VAT reclaim process.

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