(scotland) Limited
  • 0141 636 9353
  • 0141 636 9490
  • 0141 636 9492

HMRC has announced that the requirement to retain fuel VAT receipts must be continued.

Following infringement proceedings taken by the European Commission against the Netherlands, the UK introduced the need to retain fuel VAT receipts, in 2006, in order for businesses and other organisations to claim a VAT deduction on mileage allowances.

The requirement to retain fuel VAT receipts for employee expense claims, where only a mileage allowance has been claimed, was looked into by The Office of Tax Simplification ('OTS').

The OTS has recently published its final report of its findings on the review of employee benefits and expenses. The report also included an update from HM Revenue & Customs ('HMRC') around its progress made on the 'quick wins' previously recommended by the OTS which, if adopted, should benefit both businesses and individuals and make the administration aspects simpler in relation to employee benefits and expenses.

HMRC has confirmed that this 'quick win' around VAT cannot be achieved as the requirement to retain fuel VAT receipts, in order that businesses and other organisations can claim a VAT deduction, is derived from European Union VAT law relating to the retention of receipts for VAT purposes.

The announcement is a timely reminder for businesses and other organisations to:

a) ensure that fuel VAT receipts are retained in order to support VAT deduction both historically and going forward; and
b) provide an opportunity for a historic VAT reclaim where businesses have retained the relevant fuel VAT receipts but have not made any input tax (VAT) claim.

Who is potentially affected?

  • Businesses and other organisations who may have employees incurring business mileage costs and either have been recovering input tax (VAT) without retaining the proper fuel VAT receipts as proper evidence, or do hold the required receipts but have not made any input tax (VAT) recovery.

How can VAT Services (Scotland) Ltd help you?

  • We can assist businesses and other organisations by reviewing its VAT recovery position for business mileage. This includes consideration of the fuel element of the mileage allowance and fuel scale charges where VAT on private use fuel has been recovered.

Contact us

Should you wish further information on the above, please do not hesitate to contact Gary using the details outlined below.


Gary Moore
Direct line 0141 636 9353
Mobile 07812 061 582
Email This email address is being protected from spambots. You need JavaScript enabled to view it.