DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

VAT on mileage


#1

I am trying to enter employee expenses in the Expense Claims module of Manager, and have an issue with VAT on mileage.

I can claim VAT on a proportion of employee mileage claims. Although an employee can claim 45p a mile for normal mileage done, for the VAT element I can only claim VAT on 12p a mile. Therefore 33p a mile is non vatable.

So for instance an employee drove 100 miles, I would pay them £45.00. The VAT on this would be £2.00 ((100 x 12p)/6). So net would be £43.00.

My questions is, how do I enter this into the Expense Claims module so the VAT is calculated correctly?

Many thanks.


#2

One method would be to break the mileage down into two components. Apply VAT to one, but not the other.

The second method would be to calculate an equivalent VAT rate and define that as a custom tax code.


#3

Thanks Tut.

I am struggling to get the VAT to work out correctly with a custom tax code. Also, I have loads of backdated expenses to enter, and having to duplicate those would take forever.

It would work if I could manually enter the VAT value against the Mileage line item, but that is not an option currently.

I think I will handle expenses through another system, and use extracts from both systems to calculate the VAT return manually. Not ideal, but cannot see an easy solution.

Thanks for your input though.


#4

When recording expense claims, all amounts are to entered as VAT-inclusive.

@Tut is correct that you would need to split it but why is it difficult?

If employee claims 100 miles / £45.00 but only £12 is subject to VAT, then just enter two lines:

  • £12 (subject to VAT)
  • £33 (not subject to VAT)

#5

Thanks Lubos.

Sorry, had an incorrect Tax Code applied - I can get it to work over 2 lines. Since I have over a years worth of expenses to enter, will need to group them (rather than input each line item) as too many to input. Will try and input them though.

What would be really useful though, is a report I can print out for each employee - showing the expense line items (and VAT), so I can give that to them with their payment. Is this possible?

Many thanks


#6

Sorry, there is no such a report currently. It will be added in future.