Mileage ruling may lead to cutbacks

A proposed ruling banning UK firms from claiming back VAT on company mileage expenses could lead to tighter control of other company expenses, it is warned.

The Forum of Private Business believes the European Court of Justice (ECJ) ruling could be extended in the future to areas such as hotel use, phone bills and taxis.

In March, the ECJ declared the law allowing firms to claim back VAT on staff mileage expenses is illegal.

Forum of Private Business (FPB) chief executive Nick Goulding said he was concerned that the ruling would set a precedent for other similar legislation.

He added: "Small firms and the European economy need less red tape, not more."