Drive to reclaim fleet support VAT

The countdown is on for fleet companies to submit claims for VAT rebates worth millions of pounds.

HM Revenue and Customs will consider VAT refunds on fleet support bonus payments paid to companies that purchased vehicles outright between 1973 and 1996/97, as well as mileage reimbursement payments made by companies to employees.

Geoffrey Bray, chairman of Fleet Support Group, said reducing costs is foremost on the agenda given the current economic climate.

‘Vehicles represent a huge area of cost and, unfortunately, there are many organisations that are not dealing with this issue. Companies should lodge claims now, which could result in a significant financial windfall,’ he said.

According to KPMG, a fleet of 100 cars with a list price of £15,000 and an average bonus payment at 10% could result in a significant repayment. With VAT at the time paid at 15%, the overpayment would be £19,568. Any bonus payments then made several years after could make the VAT significant - £156,520 over eight years plus interest, resulting in a rebate of more than £300,000.

The claims are the latest to stem from the Fleming case, whereby over-paid or under-claimed VAT is being recouped following a decision by the House of Lords. The deadline for claims is 31 March, 2009.