A Quick Guide To Recovering VAT on Staff Expenses

Who made VAT so complex is a question we will not go into but here at McDade Roberts we aim to take the confusion away for our clients. Below is a quick guide to one question we receive - how to recover VAT on staff expenses.

Although the VAT rules normally prevent you reclaiming VAT on supplies that are not made direct to you, there are certain circumstances when the rules are relaxed.

Subsistence Expenses

For instance, the VAT element of subsistence expenses paid to your employees may be treated as input tax. In order to qualify for this concession, employees must be reimbursed for their actual expenditure and not merely receive round sum allowances.

VAT invoices (which may be made out to the employee) must also be obtained.

Reimbursement for Road Fuel

The VAT legislation permits you to treat as your own supply road fuel which is purchased by a non-taxable person whom you then pay for the actual cost of the fuel. This would therefore allow you to recover input tax when you reimburse your employees for the cost of road fuel used in carrying out their employment duties.

Again, VAT invoices must be obtained.

Mileage Allowances

The legislation also enables you to reclaim the VAT element (or a reasonable approximation) of mileage allowances paid to employees.

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At McDade Roberts we aim to make accounting as friendly and approachable as possible for our clients. If there is a question you have that you think we can help you with, just pick up the phone and contact us today.