VAT Recovery through Analysis

Every year, we help clients review and recover VAT they have incurred across different EU Member States.

In one recent case, the client had been encountering problems with obtaining refunds for all the VAT it was incurring. Crucially though, the client did not understand why this was.

Our work with the client started by reviewing the costs it was incurring. The reason for doing this was to determine if the VAT had been correctly charged. This is a fundamental piece of work to undertake because if the VAT should not have been charged, a claim to recover it will always be rejected. Many VAT recovery providers do not begin with a thorough analysis, preferring instead to ‘take a chance’ on a claim.

Incorrect Charging

We identified that a significant amount of the VAT our client was incurring should not have been charged by its supplier. We therefore communicated with its supplier to explain this position and show why VAT should not have been charged. As a result of this work the supplier issued credit notes to our client and repaid the VAT. This resulted in our client obtaining the monies much more quickly than if a repayment claim had been made. More importantly, the supplier will no longer be charging VAT going forward which will improve our client’s cash flow position and save it money because it will no longer have to make repayment claims.

Making Claims Efficiently

Having resolved this issue we then helped our client with recovery of the VAT that had been charged correctly. This was achieved in two ways. For some of the VAT costs we were able to make a repayment claim to the tax authority. Because of the previous analysis we had undertaken, the thorough information we provided when submitting the claim resulted in a prompt repayment to our client.

Secondly, we assisted our client to register for VAT in one of the countries where the VAT was incurred. Our analysis had identified this need to register because of the supplies our client was making. Once registered, our client was able to correctly account for the VAT due on its sales but also recover the VAT it was incurring. This was a double success: it ensured the client met compliance obligations (which it might have easily missed), and also reduced its cost base.

Consultant Led

Our consultant led compliance approach enables us to provide services of this type. Operating in this manner ensures we only take the actions required to achieve risk-managed optimum outcomes.