Wolverhampton based firm of Chartered Accountants AGS is advising local businesses to be aware of further clarification issued by HM Revenue and Customs regarding claiming tax on business mileage.

Under the original guidelines announced in December 2005, in order to claim tax back from business mileage, employers were instructed to provide a VAT invoice whenever fuel is purchased to uphold the claim for expenses. Prior to this no supporting VAT documentation was required when making a claim. The new controversial legislation has created confusion and difficulties for businesses, and many felt the guidelines were impractical.

However new clarification states that at the end of any claim period there should simply be adequate invoices to support the claim of business mileage with less focus on a VAT invoice for every individual claim from every individual employee.

Steve Aston, partner at AGS, comments: "Under the new legislation, reclaiming VAT on business mileage has become much more arduous.

"Businesses should now be made aware that due to the new clarification, as long as some invoices are provided, and this figure is compatible with the business mileage claim, then a valid tax claim can be made. Therefore it is not imperative that all individual claims are accompanied with the exact VAT documentation.

"It remains up to the employer to ensure that they have sufficient invoices to match their claim. Our strong recommendation is that expense procedures should be modified to ensure that their systems are efficient."