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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Kit Question
Which of the following statements is/are correct?
1. When a business pays for fuel costs for an employee and there is some private use of the vehicle, a VAT charge will be payable even where the full cost of the private fuel is reimbursed by the employee, with output VAT being payable on the reimbursed fuel
2. When a business pays for fuel costs for an employee and there is some private use of the vehicle, a VAT charge will be payable if the employee does not reimburse the employer, with output VAT being due based on a prescribed scale charge.
Answer: 1is wrong and 2 is correct. Can you explain 1st statement?
Both are correct*
This topic is fully covered in the Open Tuition chapter on VAT