'Getting your money back: Don’t let the hassle factor stop your business from recovering eligible foreign VAT' by Stephen Pearse, VAT IT
Why is it that reclaiming eligible foreign VAT (in just the same way as thousands of Australian business routinely file their GST returns) is something that so many business either don’t know about, or overlook completely? The answer is surprisingly simple – it’s the hassle factor.
Australian businesses are entitled to reclaim significant amounts of VAT paid in the UK (and many other European countries) on regular business travel expenses including hotels & accommodation, transport, food and other services such as trade shows or exhibitions. It’s a simple proposition – but the devil is in the detail. What categories of spend are eligible for recovery, what are the applicable rates, and when and in what format claims should be lodged all vary.
It’s no wonder therefore that to successfully recover the foreign VAT incurred from international business trips, to the UK or elsewhere, takes time, effort and expert knowledge. Larger businesses may have in-house expertise or given their greater spend have already contracted external specialists – but for many smaller or medium sized organisations the effort required does not appear to match the possible return. This is why so often the money is foregone: written off to expenses rather than recovered back into the business as much needed operating cash.
ABCC Chamber members will quickly appreciate that with the UK VAT rate at 20%, and with VAT eligible to be recovered across many categories of business travel expense, if you have travel to the UK you could stand to recover significant amounts. Add to this that VAT can be recovered for spend incurred for the prior calendar year (2017), if claims are properly lodged prior to the deadline of 31 Dec 2018, and suddenly the potential recovery could be of material value. But the hassle factor remains - how do you overcome the practical and expert knowledge barriers to even start the process?
There are a few options. You could hire your own indirect tax expert – but that’s likely to be impractical and expensive. You could try and manage claiming yourself – but it will take time and the rejection rate of submitted claims may be very high. Or you could use the services of one of the global specialists in this area – such as VAT IT.
VAT IT specialises in global indirect tax recovery – it’s what they do. So what is the hassle factor for your business is instead their daily routine. Their specialisation and application of sophisticated technology means that the VAT recovery claim process becomes simple, seamless and inexpensive for you – VAT IT provide a ‘no recovery, no fee’ service. In other words, if upon review there is no eligible claim to be made, then there is no cost for your business. A simple agreement with VAT IT is all that is required to start. It’s a win-win as VAT IT only charge a percentage of successful claims.
The UK deadline of the end of the year for submitting VAT claims to include spend from the prior calendar year is fast approaching. ABCC members who don’t already recover their foreign VAT and are want to learn more about this opportunity should therefore act now – in practical terms the deadline is much earlier, as time is required to make contact, investigate, agree and then submit claims.
Concierge Travel Group are VAT IT’s business development partner in Australia – so please contact Stephen Pearse at email@example.com to start the process of claiming your eligible share of the estimated A$500m of foreign VAT left unrecovered each year by Australian business.