Prevent employees from fiddling fuel claims

A recent survey of fuel claimants in the UK indicated that as many as 1 in 10 company motorists admit to hiding personal purchases among their mileage expenses, and that one in five drivers spend up to two or more hours filling out their mileage expense forms. Many company drivers also admitted to using pay-and-reclaim schemes operated by their employers to mask other purchases, including cigarettes.

Managing fuel claims effectively
With Expenses you can look at each claim individually, or as part of a group of claims. This enables your employee expense managers to identify areas for policy improvement including setting a default mileage for each road journey that a user takes.

Predefining your mileage retains the simple claim entry format. When a claimant selects a travel destination in the claim details section, the mileage field is automatically populated. At a later stage all exceptions can be reported on using the online reporting module, which will allow you to introduce new policy retrospectively.

As the average mileage claim made by a claimant is over estimated by 20%, setting predefined limits can equate to a considerable saving for your organisation:

Claimant using a Company Car or those with a car allowance:

Claimant using their Own Car:

Defining set mileage between locations is just one way of ensuring that you are only reimbursing the legitimate business entities of a claim. Expenses    also checks employee claims for duplicate claims and claims which exceed company policy limits.

The system also further discourages this type of fraud by requesting employee Odometer readings and collecting location postcodes which are valuable tools when ensuring mileage claimed is correct and legitimate.

To put it simply if you don't monitor and ensure you are gaining all the information regarding the the expense, you are giving the claimants the perfect opportunity to fiddle with claims putting corporate profits straight into your employees back pockets.

Claiming back the VAT on Fuel Claims
For companies that reimburse employees with a company car for business travel a ‘pence per mile’, Customs and Excise will allow you to claim back the VAT portion that relates to fuel only. (Note: the portion that relates to fuel depends on the fuel consumption of that car.)

For companies that reimburse employees using their own cars for business purposes a ‘pence per mile’, the VAT claimable amount still has to relate to the fuel only portion. Therefore, the figure has to be pro-rata'd to the appropriate amount for fuel only, before calculation.

This becomes very complicated so, many companies have opted for a dispensation that agrees an average figure to make the calculation easier. But is this really benefiting the organisation?

Example: VAT of 1p per mile is agreed, which assumes a car is doing about 50 miles to a gallon. As the average expense Claimant’s car probably does 25 miles to a gallon, the amount should really be about 2.4p per mile, assuming that a gallon of fuel costs £4 and the vehicle uses 16 pence of petrol per mile:

Expenses is designed to calculate accurately each potential occurrence of VAT behind the scenes, ensuring that Claimants do not need to understand any complex rules and calculations.

Expenses will ask the Claimant for the information needed to allow for the VAT to be calculated and recovered. Where an Organisation has a dispensation expenses can be set to only claim a certain percentage of the VAT.

Expenses can automatically calculate the correct VAT for overseas trips. The applicable VAT rates are setup for each country.

There are two values for each expense item that can be added:

• The VAT Rate is the percentage VAT that has been charged by the country for this expense item
• The Claimable %age is the percentage that the UK HM Revenue and Customs allows to be reclaimed for each item

Expenses automatically calculates the percentage result and will use this value for the expense item of the country selected by the Claimant. All expense items default to the base currency of the company and for trips to a foreign country the Claimant simply selects the appropriate country from a simple drop down menu.