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Firms face fines for reclaiming VAT on calls

Businesses are risking fines for not separately accounting for the business and personal calls made by staff on corporate mobile...

Businesses are risking fines for not separately accounting for the business and personal calls made by staff on corporate mobile phones - a task that can create a headache for IT departments.

Customs & Excise has set up a task force to pursue companies that reclaim the VAT on personal phone calls. A Customs spokesman said, "We are aware of the problem and we will crack down on it. Where companies have wrongly claimed VAT, it will be up to them to give us the correct figures, otherwise we will issue our own estimate."

John Wright, special interest group leader at the Communications Management Association, said, "Over recent months some major companies have been fined a total of £1m for VAT reclaimed on personal mobile calls."

Wright said companies faced great difficulty in separating personal and business call costs, and the problem would get worse with the wider use of mobile data services. For billing purposes, GPRS use is usually measured by data volume, so you cannot tell whether sports results or sales data has been downloaded.

Wright said companies needed to either enforce a usage policy or outsource the whole process.

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