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.
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?
Luckily within minutes CBV will provide you with all that information within minutes!!!
What can be done?
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