VAT Reclaims

A VAT reclaim is reclaiming the VAT paid on goods and services if they have been purchased for use in your business. 

You can also reclaim VAT if you have overpaid it previously as long as you are VAT registered and have historical records to prove it.

What happens?

Businesses owners are either:  

  • Overpaying/underpaying VAT
  • Missing VAT registration
  • Not knowing the correct VAT rates on products 
  • Paying VAT on exports

These problems lead to audits or inspections from the VAT office which could result in fines and penalties. 

The most common of these problem’s is that sellers add the wrong VAT rate to a product as they are unaware of the correct percentages. This can be very difficult to keep on top of as there could be thousands of transactions that happen daily. 

Also, if you were paying VAT on exports that were outside of the EU then you do not have to pay VAT as exports are zero rated. Many sellers make this mistake!

Online sellers also miss the their VAT registration which is quite easy to do if you are not monitoring all your sales.

An example would be; if you were selling children’s clothes within the UK and you added the standard UK VAT rate of 20%, this would in fact be incorrect

The reason why is because anyone selling children’s clothes does not need to pay VAT as it is a zero rated item

For more information on VAT rates on products click here.  

What should be happening?

The accurate way to apply the VAT is on the NET amount of the sales. 
What sellers tend to do is deduct VAT on the GROSS amount which is incorrect. 
The products that you sell must have the correct VAT percentages for the type of product it is. That ensures you are paying what you should be and are compliant. 
The correct VAT rates should be added to your products whether they are  5%, 20% or 0%.

Luckily within minutes CBV will provide you with all that information within minutes!!! 

What can be done?

The remedy is simple! you login to the CBV portal and then connect to your marketplace channels to your profile and within no time you will have all your sales and VAT data from your very first sale!  
Its literally that simple! 
This will allow you to see if you have over payed or underpaid any VAT throughout the time of your business making sales. 

In order to reclaim VAT, you must have appropriate documentary evidence to back up your VAT claims which CBV provides. 

The example below shows you how CBV can capture your online Sales and VAT data from the beginning of time right back to your first sale!

For the below example we have used the date: 05/2016 

You can identify whether or not you have paid the correct VAT amount on sales as CBV’s advanced algorithms capture that data for you as displayed below in the VAT section of the report 

You can see the accurate VAT figures for ES, DE & GB channels. 

Another benefit CBV offers is that if you were ever asked to request your historical VAT reports and other sales information, you can have it all at the very touch of a button!