Monday, June 10, 2013

Accounting for VAT reclaim on mileage expenses - UK Business ...

Evening,

Just doing some much needed catching up on book keeping, so it's not a mad rush before VAT return is due at month end.

The company has an employee who drives their own car for business purposes. Most days they cover approx 80 miles in their car, and submit an expense claim for this.

I'd like to claim/offset the VAT on the fuel element of the allowance (the input tax) and just wondering how I deal with this in Kashflow. The expenses claim is put through as normal, and the amount owing is paid to the employee - but how do I account for the VAT?

The example I'm looking at is as follows -

Total business mileage (documented) - 1800
Mileage allowance paid - 40p
Fuel element of allowance - 15p
Total paid to employee - ?720
Amount of VAT (I think) - ?54.54

I currently just have the expenses transaction in as a travel expenditure, however obviously can't show standard 20% VAT as the amount isn't 20% of the claim, it's only of the fuel element.

I may be way off with this, so if I am please tell me! If not, and I'm along the right lines, how do I account for this so that ?54.54 input tax is accounted for and therefore offset against my VAT liability.

Many thanks,

__________________
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Source: http://www.ukbusinessforums.co.uk/forums/showthread.php?t=299661

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