March 2009

DON’T MISS OUT ON RECLAIMING VAT

Auker Rhodes accountants are reminding businesses involved in overseas trade that they could be in line for a VAT refund windfall on entertaining foreign clients, but time is running out to make backdated claims.

HM Revenue & Customs (HMRC) has traditionally blocked businesses from reclaiming VAT incurred when entertaining overseas contacts, but a recent European Court of Justice ruling has opened the door to claims for repayment of VAT.

However, businesses need to act swiftly if they want to make reclaim VAT on this type of expenditure, or on VAT overpaid any other aspect of their operations.

A Source from the firm said “Last year, following HMRC’s January 2008 defeat in the cases of Fleming and Condé Nast concerning a three-year cap on VAT adjustments, HMRC gave businesses until 31 March 2009 to reclaim VAT overpaid between 1973 and 1997.

With VAT reclaimable from almost 40 years ago, historic claims are likely to be based on estimates as detailed records on expenditure are unlikely to have survived.

VAT is a complex issue, but in the current economic climate few businesses can afford to miss out on what could be a substantial rebate and it is certainly worth seeking expert advice on preparing a claim before the opportunity is lost”

The author is a director in Auker Rhodes Chartered Accountants of Bradford, members of UK200Group with offices throughout the UK and Associates overseas.

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