UK businesses are losing 12 per cent of their revenue because they are failing to reclaim VAT, the latest research has revealed.
The data comes from a report that surveyed finance and business leaders in the UK, exploring how businesses have been recouping money following the impact of the coronavirus pandemic.
The report also explores why businesses might not be reclaiming VAT effectively and what digital tools are available that could help them become more efficient in the future.
Businesses have faced a series of unique challenges in the past 12 months, while reclaiming VAT has been difficult due to an increase in remote working, VAT deadlines being deferred and expense claims and invoices being submitted in different ways.
According to the survey, almost half of all finance leaders believe that the pandemic has created significant challenges in understanding the impact of changing VAT regulations on claims.
Business leaders have stated that increasingly complex regulations are causing issues for businesses in terms of reclaiming VAT and managing expenses, resulting in many not reclaiming VAT correctly.
One-quarter of respondents stated that they did not reclaim VAT due to employees submitting expense claims that had either incorrect or missing information, with the same amount also stating that they didn’t reclaim because there were different VAT rates for items listed on the same expense claim.
Additionally, 59 per cent have claimed that they did not have the digital tools in place to reclaim VAT, while 53 per cent of those that do have the digital tools in place admitted that they aren’t getting the most out of them, citing the complexity of processing claims as a key issue.
For help and advice with related matters, please get in touch with your Seymour Taylor representative or contact us on enquiries@stca.co.uk 01494 552100.
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at time of publishing 17 March 2021.