Written by Tracey Turton, Software (Europe) Ltd
For further information please call: 01522 881300
Organisations lose thousands of pounds each year through unclaimed VAT associated with employee expenses claims.
To recover this lost revenue, without an automated solution, means strict guidelines in T&E policy and knowledgeable finance teams must be in place.
If you have an automated solution reporting and analysing this data becomes much simpler and quicker. Below are two examples of how expenses can help you to report on your un-reclaimed VAT on VAT applicable expenses items.
1. Expense items that are VAT applicable but remain unclaimed
Generally, when employees make an expenses claim the last thing they consider is getting a VAT receipt.
The graph below is indicative of 20 employee’s expenses claims over the last quarter. It shows the total amount of each item claimed without a VAT receipt where the VAT from the item could be reclaimed.
| Item | Total | Reclaimable VAT |
| Breakfast | £99.80 | £17.47 |
| Business Calls | £438.40 | £76.72 |
| Care Hire | £203.17 | £35.55 |
| Conference Room Only | £240.00 | £42 |
| Hotel | £14955.25 | £2617.17 |
| Lunch | £2805.77 | £491.01 |
| Lunch Directors) | £1293.26 | £226.32 |
| Misc | £2942.89 | £515.01 |
| Mobile Phone | £492.22 | £86.14 |
| Parking | £778.95 | £136.32 |
| Taxi | £4713.84 | £824.92 |
Total VAT not reclaimed = £5068.63
2. Users making claims without a VAT receipt
Being able to identify which users are making claims without a VAT receipt will allow you to contact them directly and request that they do so for future claims.
The graph below shows a selection of users who have made VAT applicable claims without a VAT receipt.
| User | Total | Reclaimable VAT |
| Adele | £286.40 | £50.12 |
| Caroline | £58.69 | £10.27 |
| Darren | £422.07 | £73.85 |
| Deborah | £2224.68 | £289.32 |
| Melanie | £577.81 | £101.12 |
| Paul | £4776.15 | £835.83 |
| Pete | £13447.52 | £2353.32 |
| Steve | £3327.16 | £582.25 |
Total VAT not reclaimed: £4396.08
(This only includes the main Users of expenses - other users report negligible amounts of unclaimed VAT each)
In Conclusion
Reporting on your employees expenses claims with a simple, reporting wizard that allows you to extract data and presents it to you in a clear comprehensive source, is invaluable to analysing employee spend.
Data can be presented in tables or exported graphically. This allows you to isolate which items are losing you the most in un-reclaimed VAT and which employees are consistently failing to make claims with a VAT receipt.
The reports shown above are just a small percentage of the total expenses claimed each quarter and when you equate this information for the year you could easily regain at least £20,000.
About Software Europe
Software (Europe) Ltd, formed in 1989 and trading as Software Europe, is an independent computer software company providing software solutions to the U.K. and European markets. We have searched the world for the best of breed solutions and have also built our own excellent products.
Our solutions cover five main areas:
- Employee Expense Management
- Contract & Supplier Management
- IT Security Software
- Mainframe Operations
- Mainframe Development
About expenses
expenses, a leading UK based expense management system, has been designed by Software Europe to give you greater control over your employee expenses, increase your productivity and profitability and ensure relevant Tax & VAT is automatically adhered to, in accordance with HM Revenue & Customs.