Businesses fail to recover more than £100m in VAT

MORE THAN £100m IN VAT went unrecovered by businesses in 2010, according to a new survey.

GlobalExpense's survey calculated that around £124m in VAT went unclaimed by businesses due to 41% of mileage claims failing to have a valid receipt.

The VAT rise to 20% could see that figure rise higher than £140m in 2011.

UK businesses lost £1.3bn in fraudulent and excessive expense claims during 2010.

The Employee Expenses Benchmark Report 2011 looked at 11.2 million expense claims made by more than 308,000 UK-based employees.

It found £324m were fraudulent, and £1bn were outside company policy, the report by the online expense management business GlobalExpense said.

Questionable claims included: a payment of over £4,000 for prep school fees; more than £26,000 for a final payment on a holiday to Las Vegas under ‘sundries'; £1,200 for lap dancers at Stringfellows; a porn film on a hotel invoice, for which the description of purchase given was "argument with the wife".

David Vine, CEO of GlobalExpense, said: "The proportion of claims that are outside company policy, but are approved anyway, is still too high and fraudulent claims remain a problem. Businesses need to improve policy enforcement and should insist on getting receipts from their employees to support all claims."

Managers were more likely to make a claim outside of company policy as the average expense amount increased for them in the last year by £18 compared to a decrease for employees of £90.