The Value Added Tax (Input Tax) (Reimbursement by Employers of Employees' Business Use of Road Fuel) Regulations 2005

• Citation: S.I. 2005/3290
• Sections: 7

Section 1

These Regulations may be cited as the Value Added Tax (Input Tax) (Reimbursement by Employers of Employees' Business Use of Road Fuel) Regulations 2005 and come into force on 1st January 2006.

Section 2

Regulation 5 shall apply where—

(a) road fuel is supplied to a taxable person (employer) in circumstances where it is delivered to and paid for by his employee acting in his name and on his behalf for use by him (the employee) either in whole or in part for the purposes of the taxable person’s business; and

(b) the taxable person has agreed to reimburse and does so reimburse his employee for the cost of the road fuel so used in one of the ways specified in regulations 3 and 4.

Section 3

Where all the road fuel is used for the purposes of the taxable person’s business, by payment of the actual cost of the road fuel.

Section 4

Where only part of the road fuel is used for the purposes of the taxable person’s business, by payment of either—

(a) an amount which represents the actual cost of the road fuel so used determined by—

(i) the total distances travelled by the vehicle in which the road fuel is used for the purposes of the taxable person’s business; and

(ii) the cylinder capacity of that vehicle; or

(b) the actual cost of the road fuel in circumstances where the taxable person will account for output tax on any private use under section 57 of the Value Added Tax Act 1994.

Section 5

Where this regulation applies, subject to regulation 6, the amount of input tax to be deducted by the taxable person under section 24(1) of the Value Added Tax Act 1994 in relation to the supply of road fuel referred to in regulation 2 shall be quantified by reference to the amount paid by him to his employee as reimbursement under regulation 3 or 4, as the case may be.

Section 6

These regulations only apply where the taxable person holds a VAT invoice which contains the details prescribed by regulation 14(1), regulation 14(2) or regulation 16(1) of the Value Added Tax Regulations 1995 as may be applicable and, where so required, is made out to him as the recipient of the supply.

Section 7

In these regulations, “use for the purposes of the taxable person’s business” means use for those purposes by the taxable person (employer) in making onward taxable supplies.