What can you reclaim on staff expenses?
In order to reclaim staff expenses, your employees have to be:- Someone directly employed by you
- Directors, partners or managers
- Self-employed people are treated exactly like your employees (if paid the same way)
- Helpers or stewards that assist in running events
Those who don’t fall under this category are pensioners and former employees, shareholders, and someone applying for a job with your business, aka interviewees.The expense has to be necessary for the staff member to carry out the work. It should be incurred in the performance of the employee’s duties. It should be incurred by and paid for by the employee.Expenses for entertaining
When your staff are entertaining on behalf of the company, VAT isn’t available to reclaim. This is because it’s not necessary for the business to do so and therefore isn’t considered eligible for a reclaim.However, other business expenses around entertainment can be reclaimed, check out more on business entertainment expenses here.It may take some time in order for your staff expenses to be processed and for your business to actually claim VAT. There may also be some waiting time in between when your VAT return has been submitted and when you receive your VAT refund. However, it’s all worth the wait when you could be saving a lot of money for your business.Top businesses tips for efficient VAT recovery solutions
For effective VAT recovery, there are some helpful tips and frequently asked questions that are worth knowing to help make your reclaim as successful as possible. Remember, you can’t reclaim VAT if you already pay employees a flat rate for their expenses.VAT on foreign travel expenses
Most countries will allow you to reclaim VAT on travel expenses. These will be things like accommodation and meals. Transport while in the country is also covered from rental cars to public transport.A lot of transport and motoring, when it comes to your employees, can be eligible for reclaims as long as it’s not for private use.A non-EU company can reclaim VAT that’s put on employee business travel and expenses incurred in the EU. The list of expenses to be claimed can vary depending on the country and it’s legislations in place.Can you reclaim VAT on staff medical expenses?
If you’re based in the UK, then a lot of medical services and insurances will be exempt from VAT and therefore you won’t need to reclaim. However, there are some that you might think of as being medical but aren’t. Anything that’s cosmetic or for aesthetic purposes, will be exempt.Keep all of your VAT receipts for recovering VAT
One of the most important things for efficiency for reclaiming VAT is to have all of your VAT receipts kept and stored in an organised and safe manner. Trust us, expense management will help a lot further down the line. Practice good bookkeeping now, and it will pay of at the end of the tax year.For the UK, you need to keep hold of four years worth of VAT receipts and if you haven’t reclaimed some of these in previous years, you can still reclaim it today. Make sure this is communicated in your travel policy for your workforce, if they don’t keep their receipts then their expenses cannot be reclaimed.Find out your vat refund for your next upcoming trip
Try out our VAT refund calculator to find out how much money you can save on business travel.