5 Apr 19

Not reclaiming VAT is costing fleets a lot of money

Too complex, too time-consuming, and the service is used only incidentally anyway: those are some of the most common excuses for fleets not to reclaim VAT on a range of mobility services, a Dutch study by mobility card provider XXImo shows. Too much effort for too small a return, is the thinking behind non-reclamation of VAT on services used and paid for. But it all adds up, and the practice can lead to significant levels of avoidable expenditure. 

As shown by the research, VAT reclamation is most common for standard and frequent mobility services such as refuelling (77%) - but even here, VAT remains unreclaimed in no less than 12% of cases. And VAT reclamation declines for other service categories:

  • charging an EV: 76%
  • international travel: 69%
  • carwash: 66%
  • parking and tolls: 65%
  • carsharing: 64%
  • taxis: 62%
  • public transport (pictured): 58%

Not only does public transport have the lowest rate of VAT reclamation, but 21% of those surveyed also said they 'never' reclaimed VAT at all from employee expenditure on public transport, more than any other category (a further 21% said they 'sometimes' reclaimed VAT for this mobility category). 

The main reasons provided for not reclaiming VAT were that the particular mobility option was used too incidentally (31%), that the reclamation process was too time-consuming (23%), too complex (20%) or simply unknown (15%). Nearly two-thirds of the decision makers surveyed were unaware of a solution, as offered by XXImo, which clearly itemises all corporate mobility options on a single invoice, facilitating the reclamation of VAT. 

Authored by: Frank Jacobs