TaxCorporate TaxVAT rules on mileage expenses ‘out of line’

VAT rules on mileage expenses 'out of line'

European Court of Justice says UK's VAT rules on staff mileage expenses are out of line with EU directives.

The European Court of Justice ruled yesterday that the UK’s VAT rules on staff mileage expenses were incompatible with EU directives.

Link: Customs demands remote access to VAT data

The decision threatens savings of up to £250 million a year made by British businesses on mileage expense claims, expense claims handler GlobalExpense said in The Daily Telegraph.

The court ruled that UK law was more flexibly-worded than other rules in other EU states, where tax authorities often require formal VAT invoices. UK law makes it possible for employees to claim mileage expenses while on private business, the court said.

Paddy Behan, a VAT specialist at Grant Thornton UK, said: ‘The existing rules were pragmatic and fair but even though the UK has lost, the reasoning of the court gives some guideline how the UK legislation might be remedied in the future.’

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

2m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

2m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson