The easy way to ensure your people claim the right tax and reclaim all the VAT back
Should an expense item be recorded as an employee benefit, entertainment or business travel and subsistence? If your people get this wrong, you will not be reclaiming full VAT and you could be risking fines in excess of £100K if you cannot prove that the expenses claim played a legitimate role in the conduction of business!
Our online employee expenses management software, Selenity Expenses, is a huge help in getting this vital process right, with compliance facilitated at every step, ensuring all complicated claims are recorded correctly, to comply with your policy and legislation.
As so much information will already be held in the system, and employees are only asked essential questions to make their claim compliant, no in-depth knowledge of finance or VAT is required outside your finance team.
Even better, our partnership with cross-border foreign VAT reclaim experts, Global Tax Reclaim, our Expenses Expedite service can take care of this for you.
The benefits to your organisation
This allows your organisation to realise the maximum amount of VAT to be reclaimed and capture the information required in terms of:
- Employee entertainment.
- PAYE settlement agreements.
- Minimising corporation tax.
- Maximising UK VAT reclamation.
- European VAT handling.
- Personal incidental expenditure.
- P11D reporting.
VAT invoices and Expenses
When it comes to VAT receipts, the system will prompt the claimant to enter the necessary details in order for the correct amount of VAT to be automatically calculated at the correct rate and to ensure the correct invoice/receipts are obtained.
The incorrect classification of an expense is a sizeable loss to an organisation and is often carried out through lack of supporting information or an incorrect understanding of the rules. The following example is a sobering example of how much an organisation will pay for a £100 meal depending on how it is qualified:
Input tax can be claimed and no tax is incurred
Actual costs £85.11
Subject to 30% corporation tax and input tax cannot be recovered
Actual costs £130.00
Subject to PAYE settlement agreement for a 40% tax payer
Actual costs £180.00
In many cases, organisations who have not automated expenses (with a supplier who understands UK VAT rules) lose 20% of the VAT they should claim back. Assuming 100 employees regularly claim expenses, with an average monthly claim of £200 and 50% of all claims being subject to VAT, at 20% this equates to £18,200 tax being unclaimed for that year.
Easy information gathering and improved tax and VAT management
- Recover the maximum VAT.
- Capture information for P11D reporting, and PAYE Settlement Agreement.
- Facilitate corporation tax calculations with accurate documentation of entertainment expenses.