VAT and driving

While writing the article about lease cars, we wondered how you can refuel for business but drive privately. That is why we have investigated and written out the following question in this article:

“Is it allowed to fill up with a business fuel card when taking a private trip?”

A short answer to that is: Yes, you can. The addition includes the use of business fuel, but you do have to pay VAT on private purchases, unlike business purchases. If you have paid for the fuel in the tank with your business card, you will of course pay VAT at the pump, but you can deduct it for business. So when you take a private trip, you simply have to pay VAT on the fuel you use. How does this work then? There are a number of options for that, some are not better than the other, so do what you feel most comfortable with.

Private car business bets

The first and immediately the easiest situation to describe, buying a car privately and using it for business. In this situation, you may depreciate 19ct per kilometer driven to compensate for the profit. But you can also claim a refund of the VAT you pay at the petrol station for business trips. Make sure you keep track of how many kilometers you have driven, for example, you can use the ANWB route planner for this.

Business car, private mileage

Did you purchase the car for business? Then there are a few rules that you should remember when you are busy with your bookkeeping. Do you drive less than 500 kilometers a year privately and don't want to pay an additional fee? Then you must keep a conclusive trip registration. In this situation, it is therefore quite easy to find out your actual private miles driven. In this situation, it is not necessary to deduct VAT from private use.

Are you going to use the car more than 500 kilometers per year for private use? Then you will have to pay an addition, so a conclusive trip registration is no longer necessary. But you still have to pay VAT on the private use of your car. Then there are two methods that you can then use to settle the VAT.

Once again, the most comprehensive but also purest method is a conclusive mileage registration. When you enter a conclusive trip registration for the tax authorities, it is possible to view the proportion of private and business kilometers. This trip registration therefore makes it possible to make an exact correction so that you can pay VAT to your business.

For a comprehensive trip registration, you can use various tools (a small selection of the possible tools: TrackJack, Ride assist, Route vision), this often also includes a one-off investment plus a subscription. The alternative is to manually track what costs you time again. For a complete overview of systems approved by the tax authorities, click here.

In order to comply with the tax authorities as a conclusive registration, there are a number of requirements to meet, which you can: here find.

Don't you want all that stuff? Then another option is possible. Namely, pay the VAT via a lump sum. This lump sum is a fixed percentage of 2.7% (1.5% if you purchased a margin car for business) of your car's list price. So during the year, you simply write off all costs and then make a correction to your accounts at the end of the financial year.

Each year, you will see which of the two methods will give you the most tax benefits. So make sure you choose this!

Example:

Suppose you bought a car worth €20,000 including VAT and bpm, but you don't have enough data to keep a comprehensive trip record. Then you have to pay €20,000 x 2.7% = €540 VAT at the end of the year.

Are you still not quite sure what is most advantageous in your personal situation? Using a private car for business or vice versa? Then fill this tool in order to make a calculation and immediately gain insight into what your options are.

Attention!

When paying for fuel and maintenance, please note that it is not possible to claim a refund of VAT when paying in cash. This also applies if you did receive a VAT receipt, so make sure you always pay “digitally”. If you have a fuel card, you don't have to keep the receipts, you pay with a pin or credit card, then you do.

Fuel card

It can certainly be worthwhile to delve into a fuel card. Especially because of the advantage that you no longer have to collect vouchers and also get a discount on your fuel and other purchases at many petrol stations (make sure you see which pass offers you the most in terms of accessibility and tax benefits).

Commuting to work/work?

Another question that came up while writing this article is the commuting issue. This is a grey area in the situation of a freelancer. For this VAT issue, the tax authorities usually see commuting as private kilometers. However, as a freelancer, your client is your customer and you have your office at home, so those trips can be assumed to be business in nature and therefore not seen as commuting to work. So this shows that you do not have to include those kilometers in your calculation for private/business kilometers.

Are you still not quite sure what is most advantageous in your personal situation? Using a private car for business or vice versa? Then fill this tool in order to make a calculation and immediately gain insight into what your options are.

Do you have any questions or comments? Then go to us forum and comment there!

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