Small Business Accountants

Can I claim VAT back on my mileage?

VAT-registered businesses not on the Flat Rate Scheme can reclaim VAT on fuel. Vehicles used exclusively for business allow a full claim with valid VAT receipts. For mixed-use vehicles, businesses choose between reclaiming all VAT and paying the fuel scale charge, reclaiming only the business proportion, or reclaiming nothing. The 45p mileage allowance is an income tax concept and carries no VAT element.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 1

Can I claim VAT back on my mileage? - GoForma Tax Guides | UK Accountants & Tax Advisors

Key takeaways

Businesses on the VAT Flat Rate Scheme cannot reclaim input VAT on fuel; the flat rate percentage already accounts for typical input VAT costs.
The VAT element of a fuel purchase is calculated using the VAT fraction of 1/6 at the standard 20% rate, and a valid VAT receipt must be held to support the claim.
Vehicles used exclusively for business allow a full VAT reclaim on fuel; any private use means one of three mixed-use approaches must be applied instead.
The fuel scale charge is a fixed HMRC charge by CO2 band that lets businesses reclaim all fuel VAT on mixed-use vehicles without tracking every individual journey.
HMRC advisory fuel rates are reviewed quarterly and cover company car fuel costs; the 45p and 25p mileage allowance rates apply to income tax, not VAT recovery.

You can reclaim VAT on the fuel portion of your mileage expenses if you don't pay a fixed rate under the Flat Rate Scheme.

You can reclaim all the VAT on fuel if you use your vehicle exclusively for business.

If your vehicle is driven for both business and personal use, you may handle VAT in the following ways:

Reclaim all the VAT and pay the fuel scale charge for your vehicle
Reclaim the VAT on fuel you use for business trips
Don't reclaim any VAT. This may be the better option if you use your vehicle for business purposes on rare occasions, such that the fuel scale charge exceeds the VAT you can reclaim.

Frequently asked questions

Can I reclaim VAT on fuel if I am on the Flat Rate Scheme?

No. Businesses on the VAT Flat Rate Scheme cannot reclaim input VAT on fuel. The flat rate percentage paid to HMRC already accounts for typical input VAT costs including fuel. The only exception is capital goods costing more than £2,000 including VAT on a single purchase. If fuel spend is high, comparing the Flat Rate Scheme against standard VAT accounting is worth doing.

What is the VAT fraction and how does it apply to fuel?

The VAT fraction extracts VAT from a VAT-inclusive price. At the standard 20% rate the fraction is 1/6, so dividing total fuel spend by 6 gives the VAT element. For example, £120 of fuel contains £20 of VAT. A valid VAT receipt from the filling station must be held to support any reclaim, showing the supplier's VAT number, date and VAT charged.

What are my options for reclaiming VAT on fuel for a mixed-use vehicle?

HMRC offers three choices for mixed-use vehicles. First, reclaim all input VAT on fuel and pay the fuel scale charge. Second, keep a mileage log and reclaim only the VAT on business miles using HMRC advisory fuel rates. Third, reclaim nothing and avoid both the scale charge and the record-keeping. The best option depends on fuel spend and the business mileage proportion.

What is the HMRC fuel scale charge?

The fuel scale charge is a fixed output tax charge applied when a business reclaims all VAT on fuel for a vehicle that also has private use. HMRC sets the charge by CO2 emissions band and publishes an updated table each year on gov.uk. Paying the scale charge removes the need to track business and private mileage journey by journey, which is useful for businesses with high fuel costs.

Does the 45p mileage allowance include a VAT element I can reclaim?

No. The approved mileage allowance of 45p per mile (25p above 10,000 miles) is an income tax deduction covering fuel, insurance, servicing and depreciation. It does not carry a separate VAT element. To reclaim VAT on business fuel, you need HMRC advisory fuel rates and the VAT fraction, along with VAT receipts. The mileage allowance and VAT reclaim rules operate independently under different parts of the tax system.

What advisory fuel rate applies to electric company cars?

From September 2024, HMRC's advisory electricity rate for fully electric company cars is 7 pence per mile. This rate supports VAT recovery calculations on business electric mileage where the business pays for the charging. VAT on home charging is generally not reclaimable. Rates are reviewed quarterly in March, June, September and December, so the current figure should be checked on gov.uk each period.

What records do I need to reclaim VAT on fuel?

You must hold a valid VAT receipt for every fuel purchase, showing the supplier name, VAT registration number, date and VAT amount. If claiming only the business proportion, a mileage log is also required, recording the date, start and end location, distance and business purpose of each journey. HMRC can disallow reclaims where receipts or mileage records are incomplete, so these should be retained for at least four years.

Can a sole trader reclaim VAT on fuel if they also use the vehicle privately?

Yes, as long as the business is VAT-registered and not on the Flat Rate Scheme. A sole trader can use any of the three mixed-use options: reclaim all VAT and pay the fuel scale charge, reclaim only the business proportion with mileage records, or reclaim nothing. The chosen method should be applied consistently and reviewed if the business mileage split changes.

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