VAT on company vehicles ... new regulations
The new regulations which came into force on 1st January 2013 create a legal framework for businesses. The rules do not apply retrospectively.
So you will need to set up a ‘practical’ system for assessing business mileage accurately, along with the deductible percentage (maximum 50%).
Which vehicles are concerned?
VAT deduction relates to the whole of your fleet. That means light commercial vehicles, cars and other vehicles, both leased and owned.
Note, also, that the right of deduction will apply to VAT charged on:
- Purchase and/or cost of leasing a vehicle
- Purchase of fuel
- Repair and servicing expenses
- Purchase of accessories
How is actual business use worked out?
In practice, the authorities allow three ways of determining the share of actual business use.
- Method 1: Recording the mileage, thus monitoring each vehicle individually
- Method 2: Lump-sum calculation per company car
- Method 3: Standard method, applicable to the fleet
|More about the three methods|
The first method is undeniably the one that reflects the actual use of the vehicle... but it involves a lot of administrative work.
Telefleet is a solution that uses a geolocation box fitted to the vehicle, which sends real time travel data to a web platform.
Telefleet facilitates VAT deduction by providing evidence of actual business use of vehicles:
- By activating a switch when moving off, you indicate whether it’s a business or private trip
- By counting mileage and accurate, certified journeys
- By providing private/business mileage reports that can be used for the accurate calculation required by the regulations.
- By preventing fraud, because journeys are recorded in real time and a history is available.
You will soon see a return on your investment, thanks to
- Electronic routing orders, so no time is lost completing paperwork.
- Simplified administrative procedures. No re-coding, automatic reports, etc.
You will also enjoy a number of other benefits offered by a geolocation solution
- Your assets are secure (geolocation in the event of theft)
- Your business will be more productive (you always know where your vehicles are)
- Enhanced quality of service
- Costs are reduced and VAT deduction is optimised
- Manual processes are automated
- Compliance with legal provisions
- Management charts with integrated reports
|It’s not too late to fit out your fleet! Contact us for a quotation.|