MvVO Art Launches AD ART SHOW
Business

Reclaiming VAT: What You May Be Missing Out

Reclaiming VAT: What You May Be Missing Out

VAT is paid when you purchase some goods or services for your business. A recent study shows that most startups are missing out on the opportunities to reclaim their VAT. Basically, you can reclaim VAT if your business is VAT registered and you can get a refund for goods from different categories.

Here, you’ll learn the critical areas that will help you when you want to reclaim VAT.

Personal use or business use

Normally, reclaiming VAT is possible on goods or services that have been bought for personal use. This requirement covers even vehicles that are not used exclusively for business. However, the law has some exceptions if the vehicle is going to be used for charity work. But if the vehicle you’ve bought is going to be used for both personal and business purposes, you can reclaim the VAT portion allocated to business.

Business entertainment

Generally, you can’t reclaim the VAT for your business entertainment. However, you can easily reclaim the VAT for staff entertainment which includes team building activities, parties provided they are organized exclusively for employees.

In the event where you are entertaining business contacts alongside your employees, you will only be allowed to reclaim the portion spent on the employees. Nevertheless, if there are employees who are doubling up as hosts to the present business contacts, reclaiming VAT is not possible.

Car expenses

Reclaiming VAT for a new car you’ve purchased is only possible when you use it for business purposes only. However, you’ll be able to reclaim at least 50% of the VAT amount when leasing a vehicle. In addition, you can successfully reclaim VAT on any repairs and maintenance tasks that are paid by the business.

Basically, most of the expenses associated with business motoring qualify for VAT reclamation. These expenses may include off-street parking and fleet management.

Right paperwork

When you are reclaiming VAT, you need to have the right documents to prove that you’ve made the purchases. Here are a few examples.

  • All the VAT invoices that have all the details as required by the law
  • Self-billed invoices bearing all the necessary details to qualify for a VAT reclaim
  • Authenticated invoices for the construction industry
  • Less detailed tax invoices for things like fuel and stores

The law clearly states that only the business or person who is receiving the goods and services can make the VAT reclaim. This implies that you can recmail VAT for some personal goods that you’ve passed through the business. But even when the invoice is bearing someone else’s name but the goods have been purchased for your business, reclaiming VAT is easy.

No invoice?

Basically, you need to have authentic documentation to support the VAT claims. However, this is not to say that the only document that can be used to reclaim VAT is the invoice. In some occasion, you may not be in a position to get an invoice for a transaction but as far as you can prove the following, you can reclaim the VAT.

  • You made the purchase for business
  • You made the right checks before dealing with the supplier
  • Provide any other evidence that a transaction happened
  • You made a commercial arrangement with the supplier

 

Business

More in Business

The COVID-19 Pandemic and Real Estate – Insights by Benjamin Gordon Cambridge Capital

WriterDecember 1, 2020

Beth Ann Debouvre: The Speed of Economic Recovery After the COVID-19 Pandemic

WriterDecember 1, 2020

Learn How to Manage Your Personal Finance After Coronavirus Outbreak, as Explained by Jared Jeffrey Davis Sandusky, Ohio

WriterDecember 1, 2020

How to Know If You are Being Lured into a Forex Trading Scam

WriterNovember 19, 2020

Bankruptcy 101: The Steps You Need to Take

WriterNovember 16, 2020

Forex Currency Strength Meter

WriterNovember 16, 2020

A Guide To Getting More Likes On Instagram

WriterNovember 11, 2020

Jonah Engler: The need to give back to society

WriterNovember 9, 2020

The Importance of Having Tax and Regulatory Compliance Services To The Telecom Industry

WriterNovember 1, 2020