10 Jul VAT tips for SMEs and small business owners
Reclaiming VAT is not difficult and is well worth doing, after all if your business is due some money back it does make good sense to reclaim it. Many business owners or finance directors think some aspects of VAT are too time consuming or tedious to bother with, however, your bottom line cash flow is important, so reclaiming every penny in VAT that’s possible makes good business sense.
The following tips help you overcome any mystery or queries associated with reclaiming VAT:
Reclaiming VAT on mileage
Some business owners think reclaiming the VAT paid on business mileage isn’t worth the effort, but you can claim 100% of VAT spent on fuel purchased for business purposes. Although it is sometimes difficult to prove no private use of vehicles were made, keeping a detailed mileage log for all business trips will help you when claiming back VAT.
Claiming back VAT on international spend
If you spend time working overseas, then claiming back VAT on spend is essential as this figure can really mount up. Excluding air fares, about 4% of global travel expenditure and 10% of travel spend in Europe will be subject to VAT, so ensuring your business VAT is reclaimed really does make good sense.
Claiming historic expenses
There is a time limit in place for claiming back VAT on old expenses, four years are allowable for property you still own and six months for any services that are provided. You can also claim back tax paid from the period before you made your VAT registration, so take time now to review all your expenses and ensure that relevant VAT has been reclaimed.
Paper receipts are not always essential
HMRC will require you to keep copies of all receipts, but these can be in digital format if preferred. Employees constantly working away from the office will find it much easier to download an app to enable receipt scanning while out and about. This will ensure receipts don’t go missing and make it easier to process expense claims.
SQK Accountancy specialise in cloud accounting services, payroll and VAT. If you need expert, professional assistance with any business accountancy queries or problems, get in touch today.