A recent survey by European VAT specialist, Accordance, found that while many businesses (50% of respondents) were reclaiming “foreign VAT”, over 1 in 2 (just 57%) are uncertain about how much VAT they can recover and 50% aren’t confident whether or not they are currently assessing if VAT was charged incorrectly and/or activity required a local VAT registration.
While taxpayers are entitled to recover “foreign VAT” they incur, billions of VAT goes unrecovered. Any business can incur VAT in another country but some supply chains or transactions are more likely to create a VAT cost including conference and event organisers and land related charges. The Accordance survey found that the biggest challenges faced in making successful claims are:
– 34% correspondence in foreign languages
– 16% tight time limits to respond
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– 26% lack of appropriate documentation to support claims.
Submitting a claim is the first step towards actually receiving a refund of VAT, yet Accordance found that many businesses do not realise the amount of time and resource needed to manage the process of the claim. With 33% of those who answered the survey advising they manage their claims in-house, this is a big ask on many businesses who do not have the expertise or the time to reclaim this VAT. This is where companies like Accordance can facilitate the recovery claims by adding resource to in-house teams,as and when they need it. The survey also found that nearly 1 in 4 are making VAT Recovery claims on a quarterly basis and over 1 in 3 on a yearly basis.
Nicholas Hallam, CEO of Accordance comments, “What this survey makes clear is that there is a great opportunity for companies to reclaim VAT that is incurred when dealing with businesses across the European Union. Working with companies such as Accordance can help companies to successfully ascertain what they are entitled to claim back and give them the resource to undertake what can sometimes be a complex and lengthy process.”