Missing VAT receipts fuel mileage cost rise
The rise in the VAT rate at the beginning of 2011 will add millions to the amount businesses lose through badly documented mileage claims, according to GlobalExpense.
In its 'Employee Expenses Benchmark Report 2011', the expenses management specialist estimated that mileage claims accounted for £1.4bn out of the £3.5bn or so spent by UK businesses on travel in 2010.
Because of the requirement for all mileage claims to be accompanied by valid VAT receipts, GlobalExpense estimated that UK businesses failed to recover £124m in 2010. “If behaviour is not changed businesses stand to lose £141m thanks to the increase in VAT from 17.5 to 20%,” the report warned.
“The VAT compliance rules are complex and difficult to enforce,” it continued. Fuel receipts have to include both the VAT number and the breakdown of the VAT amount and fuel should be purchased on the day of travel, or within a reasonable period before the day of travel.
Copies of the detailed 24-page benchmark report can be requested from the GlobalExpense website. Further coverage will appear on AccountingWEB in the coming weeks.