Can you put petrol down as an expense?

Rocktoitnow

Hi i'm wondering if someone can clear this up for me,

Basically i'm a sole trader and i have commercial jeep which is petrol, some people are telling me i can't put it down as an expense only diesel can be out down as an expense, is this true?

Now i asked my account and he said you can but then i asked a person i have who owned a courier service and he said no, if anyone can clear this up that would be great or if they could point me in the right direction! Thanks...

cichlid child

From Revenue website.
What expenses can I claim?

You can claim for any business expenses which you have incurred in order to earn your profits. These expenses are normally referred to as revenue expenditure.

Revenue expenditure is your day to day running costs and covers such items as:

Purchase of goods for resale
Wages, rent, rates, repairs, lighting and heating etc.
Running costs of vehicles or machinery used in the business
Accountancy fees
Interest paid on any monies borrowed to finance business expenses/items
Lease payments on vehicles or machinery used in the business
I would imagine most machinery would be petrol.And why would you second guess your accountant he said yes that would be enough for me.

Gloomtastic!

If you are registered for VAT, you can only claim VAT back on diesel, not petrol. (They really do make the rules up as they go along - to suit them always! :mad:)

Trojan

Can claim as expense, but as above poster says, you can only reclaim VAT on diesel. Considering switching back for that reason myself.

lucky john

Not exactly on topic but it is now allowable by revenue to buy certain 5 seater jeeps for commercial use. Lower vrt, vat reclaimable and €300 tax.

Toblerone1978

lucky john wrote: »

Not exactly on topic but it is now allowable by revenue to buy certain 5 seater jeeps for commercial use. Lower vrt, vat reclaimable and €300 tax.

Not as a commercial vehicle, only as a passenger vehicle.

Alan Shore

lucky john wrote: »

Not exactly on topic but it is now allowable by revenue to buy certain 5 seater jeeps for commercial use. Lower vrt, vat reclaimable and €300 tax.

But only the business use element of the VAT for a sole trader! And car BIK if it's a company.

amen

Could you not either
a: Claim the petrol as an expense
b: pay mileage for driving to each place of work ?

barneystinson

amen wrote: »

Could you not either
a: Claim the petrol as an expense
b: pay mileage for driving to each place of work ?

Pay mileage to whom?

amen

to your self ?

Toblerone1978

amen wrote: »

to your self ?

No can do. If you're self employed, you get a tax deduction for motor costs incurred for business travel rather than mileage. One of the advantages operating through a company / legal entity.

barneystinson

amen wrote: »

to your self ?

As a sole trader? On what basis?

There is no statutory provision for the tax free payment of expenses / mileage - it operates by way of a concessional Revenue practice. This is set out in SP-IT/2/07. This makes it very clear who it applies to. It exists, presumably, to avoid a situation whereby if your employer asks you to travel somewhere outside of the norm, they would have to deduct full tax & PRSI, and then the individual employee would have to wait until after the year end to claim tax relief on their expenses in order to get a tax refund. In this regard, the expense would have to be "wholly, exclusively and necessarily" incurred by the employee - this is a much more difficult test than the "wholly & exclusively" test applied to sole traders.

It absolutely does NOT apply to a sole trader; they are required to compute their income and their expenses, and only expenses which are incurred wholly & exclusively are deductible.

So as a sole trader, you can claim the cost of petrol & motor expenses incurred "wholly & exclusively" for the purpose of the trade, but you cannot avail of civil service mileage rates / country money etc... that would apply to you as an employee.

Gerry T

talking about claiming car costs can you claim car road tax and insurance or a percentage of this ?
Secondly can you claim any VAT back....im not sure if VAT is paid on car insurance, road tax ?

Toblerone1978

Gerry T wrote: »

talking about claiming car costs can you claim car road tax and insurance or a percentage of this ?
Secondly can you claim any VAT back....im not sure if VAT is paid on car insurance, road tax ?

There is no VAT on insurance and car tax and you can't claim the VAT back on petrol and passenger vehicles. You can claim the VAT back on most other expenses, including diesel and commercial vehicles, provided its business related.

Gerry T

Toblerone1978 wrote: »

There is no VAT on insurance and car tax and you can't claim the VAT back on petrol and passenger vehicles. You can claim the VAT back on most other expenses, including diesel and commercial vehicles, provided its business related.

Thanks for that

cormie

Anyone have any idea why they don't allow the VAT to be reclaimed on petrol? Are there any exceptions to this at all?

Gloomtastic!

cormie wrote: »

Anyone have any idea why they don't allow the VAT to be reclaimed on petrol? Are there any exceptions to this at all?

Because Revenue are blood-sucking parasites who know more people drive petrol cars than deisel.

Toblerone1978

cormie wrote: »

Anyone have any idea why they don't allow the VAT to be reclaimed on petrol? Are there any exceptions to this at all?

An exception would be if you are buying petrol for resale rather than use, you can claim the VAT back i.e. if you a filling station buying the petrol to sell to customers.