It seems that Zoho is calculating VAT on mileage claims in a clever way. It seems to be calculating VAT on part of the mileage claim (the fuel part - presumably using HMRC approved rates? e.g. 17p per mile) and not on the rest (the difference between the full mileage allowance and the fuel part e.g. 28p per mile).

When the claim is exported to our accounting system, Xero, it is splitting the line items for each expense claim into two - the VATable part and the non-VATable part.

The problem is that Xero is then calculating full VAT on both parts, adding VAT which wasn't in the original Zoho claim and resulting in a higher gross expense claim payable than was actually claimed by the employee.

Is there a way to stop this error from arising?