3449468 - The system defaults the Tax Code for Mileage Expense Reports

When you create an Expense Report 123, system defaults the tax code to "Out of Scope Purchases" and you want to change it.

(Here 123 refers Expense Report ID)

SAP Business ByDesign

1. Go to the Travel and Expenses work center.
2. Go to the Expense Reports view.
3. Search for Expense report 123 and click on edit.
4. Navigate to the Expenses tab and the system has defaulted the tax code to "Out of Scope Purchases".

The non-fuel element of the mileage allowance would be treated as outside the scope of VAT.

The defaulted Tax Code "Out of Scope Purchases" is correct and there is no need to change it.

For a clear clarification, here is the explanation with a scenario as to why the tax code is 'Out of Scope'.

Using the following example, How to Calculate VAT Reclaim on Mileage:

An employee with a petrol car:

The car is over 1400c but under 2000c. The car has less than 10,000 miles.

Of the 45p per mile mileage allowance, 15p is for fuel.

The VAT rate is currently 20%. Therefore, we need to calculate 20% of 15p.

15p is 120% (100% plus 20% of VAT).

The VAT element is 15/120*20 = 2.5p

So for every business mile, you can reclaim 2.5p back on VAT.

So, the non-fuel element of the mileage allowance (that is, the 30p of the 45p quoted in this example) would be treated as ‘Outside the Scope of VAT’.

Default Tax Code, Mileage Expense Report, Out of Scope Purchases , KBA , SRD-FIN-ERM , Travel and Expense Management , Problem