VAT RETURNS IN FLEET: VAT also known as value-added tax, this term refers to a type of national sales tax that is applied to the selling price of products or services and is, under certain conditions, refundable or deductible. If it is recoverable, the tax is virtually free for the firm, as it can receive full value as an input credit for the value-added taxes it collects when it sells its products or services to the next company in the value chain or to the final customer, who is responsible for paying the tax returns in the fleet. The tax amount is claimed as a business expense on the company’s tax filings if it is deductible.
VAT may be recoverable, deductible, or neither in the case of automobiles used for business, depending on the country and other factors (such as the particular nature of a company’s operation in a certain country). In the case of leased automobiles, VAT may apply to lease payments; however, the leasing firm is often allowed to recoup VAT on their purchase of the vehicle for leasing purposes, eliminating the possibility of double taxation. VAT concerns should always be studied and researched to discover how they might affect any particular manner of vehicle acquisition and vehicle use.
A VAT Returns in the fleet is a form used to inform HM Revenue and Customs (HMRC) of the amount of VAT you’ve charged and paid to other firms. Typically, you must submit a VAT Return to HMRC every three months. This is referred to as the accounting period. Even if you have no VAT to pay or refund, you must file a VAT Return if you are registered for VAT.
The VAT return displays the calculation of the difference between the VAT owed on sales and the VAT reclaimable on purchases. The outcome is the amount owed to HMRC.