mileage

[1yearlater]

Hi im am billing a client of mine.

I have carried a substancial amount of mileage, that we agreed 40p per mile, do i charge VAT on mileage and expenses or not?

[malvolio]

If you're billing him, you charge VAT (the reason being, the fuel costs are an element of your provision of services and you therefore have to charge VAT). He can reclaim it after all, so it's tax neutral.

There's a different argument about VAT on your own expenses (assuming it's your car and you charge your company for it), where you offset the VAT element of the 40p (roughly 1.4p but different people have different numbers, as usual!) against your output tax.