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Sir there is a question that Mr x bought a fuel for 10000. He used 70% of fuel for business and 30% fuel given to employee for free.
Scale charge = 150 (inclusive)Sir here in solution while calculating input VAT, they have done following
Input VAT = 10000 x 20% = 2000Sir here why they have calculated input VAT on full 10000 amount? I do not understand this
The fuel cost of 10,000 sounds ridiculously high but the answer with that number is correct! Once again I have to ask you to look at the revision notes – chapter 25, section 4. page 144 and example 5.
It clearly states that input VAT may be recovered on all fuel expenses in full if you use the scale charge for output VATSir, as far as input vat on fuel is concerned
1) If car is used only for private purpose (whether by employee or owner) then can full input VAT be claimed on fuel?
2) If car is used for business + private purpose (whether by employee or owner) then can full input VAT be claimed on fuel?
But suppose in question there is not any scale charge , then still as far as input vat on fuel is concerned
1) If car is used only for private purpose (whether by employee or owner) then can full input VAT be claimed on fuel?
2) If car is used for business + private purpose (whether by employee or owner) then can full input VAT be claimed on fuel?
If no scale charge is applied then only the business use proportion is recoverable
So sir if no scale charge is applied and car is used for private + business purpose (whether by employee or owner) then full input vat cannot be claimed? Only business element will be claimed?
Sir as far as car repairs are concerned, whether scale charge is applied or not
1) If car is used only for private purpose (whether by employee or owner) then No input VAT can be claimed on car repairs? correct?
2) If car is used for business + private purpose (whether by employee or owner) then full input VAT can be claimed on car repairs? correct?
A business can recover ALL input VAT incurred on the running costs of a car even when there is some private use.
There will never be a situation in which not a single mile of business use exists!! Now move on from this issue!
Sir I just want to clear once more my confusion, so summarizing
a) In case of car repairs, whether scale charge is applied or not
1) If car is used only for private purpose (whether by employee or owner) then No input VAT can be claimed on car repairs. Correct?
2) If car is used for business + private purpose (whether by employee or owner) then full input VAT can be claimed on car repairs. Correct?
b) In case of input vat on fuel, if scale charge is applied
1) If car is used only for private purpose (whether by employee or owner) then full input VAT can be claimed on fuel. Correct?
2) If car is used for business + private purpose (whether by employee or owner) then full input VAT can be claimed on fuel. Correct?
c) In case of input vat on fuel, if scale charge is Not applied
1) If car is used only for private purpose (whether by employee or owner) then No input VAT can be claimed on fuel. Correct?
2) If car is used for business + private purpose (whether by employee or owner) then we will apportion it and Only business element will be claimed. Correct?
I have given all the answers that I am going to give on this question and as I said previously – move on.
Ok Sir, but as you said above, that if NO scale charge is applied and car is used for business + private purpose (whether by employee or owner) then full input VAT cannot be be claimed on FUEL. So in such situation we will apportion the business use and private use and then input VAT on FUEL will only be claimed on business use?
Exactly – I have already said that.
Any question is most likely to be testing the fuel scale charge.Ivy Ltd provides one of its directors with a company motor car which is used for both business and private mileage. For the quarter ended 31 March 2019 the total cost of petrol was £720, with the director being charged £216 for the private use element. Both figures are inclusive of VAT.
Ivy Ltd will include the following entries on its VAT return for the quarter ended 31 March 2019:
Sir here output vat they have taken 36 and input vat they have taken 120. I do not understand the output and input VAT here
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