Very seldom do businesses debate the benefits of VAT recovery. After all, adding revenue to your business naturally doesn’t spark much resistance. However, how a company approaches the VAT reclaim process warrants a closer look.
So, what’s the best approach to VAT recovery for your specific business, and is it better to outsource your VAT recovery or keep it in-house? Here’s what you need to know about in-house vs. outsourced VAT reclaim and which is best for your business.
DIY VAT recovery isn’t for the faint of heart
It’s no secret that the VAT landscape can be tricky to manage. The fact that over £16bn is owed to companies worldwide in unclaimed VAT speaks volumes about the resource-intensive and challenging process of recovering eligible expenses.
But not for lack of trying.
Many organizations give the VAT recovery a good run for their money; however, many eligible expenses slip through the cracks even then. Why? Well, that depends on the type of recovery we’re looking at.
Domestic and Foreign VAT recovery
Regarding Domestic Recovery, organizations are eligible for VAT recovery on local business expenses. Seems simple enough? Unfortunately, local transactions are volume intensive and prone to human error. Even the best finance teams are too stretched to manually comb through hundreds of eligible expenses to assess eligibility and compliance. Not only does this decrease the scope of your VAT yield, but it also hinders valuable staff members who could focus on other critical areas of business growth and financial health.
The process gets even more challenging when considering an in-house approach to international / Foreign VAT recovery. Foreign VAT generally has higher stakes involved. Combine that with a more challenging process, and you’ve got the perfect recipe for exhausting resources faster than the invoices stack up.
Foreign VAT recovery hinges on your team’s understanding of all local legislation, VAT rules, deadlines, and processes. Not only that but organizations are tasked with the responsibility of:
- Correct recordkeeping and filing processes
- Retaining the original VAT invoices on all transactions
- Understanding the local language and legislations of the reclaim country.
- Error-free and compliant invoicing instructions
- Ensuring that your contractor or supplier is VAT-registered to reclaim VAT on those supplies.
- Staying up to date with country-specific deadlines and reporting obligations.
So, what’s the solution if the process seems rife with challenges? Our tip? Change the process.
Advantages of outsourcing your VAT recovery
Fortunately, businesses don’t have to settle for playing compliance-catch-up and being satisfied with the shallow end of the VAT recovery pool. Instead, by outsourcing the VAT reclaim process, you’re tagging in a team of experts into your corner who help highlight your reclaim opportunities, streamline the process, and deep dive into niche recovery schemes that are best suited for your specific business so that you can maximize your reclaim potential. Some of the most significant advantages of outsourcing your VAT recovery include the following.
- Reduce human error and improve accuracy by avoiding overclaiming or non-compliant invoicing instructions.
- Remove the administrative burden of reviewing and assessing all transactions while staying current with local and international VAT recovery processes.
- Inject additional revenue into your business by maximizing your VAT yield, improving your cash flow, and freeing up valuable time and resources.
- Tap into the improved efficiency VAT experts bring to your business regarding their established relationship across the VAT landscape with numerous authorities.
- Follow industry best practices in an ever-changing VAT environment.
Fortunately, you don’t have to spend additional time scouting for the perfect team to outsource your VAT recovery.
Maximize your VAT reclaim without the heavy lifting.
Tech when it counts, human when it matters. We see ourselves as an extension of our clients’ finance departments. So, tag the VAT IT team into your corner and kick complicated to the curb. By automating the VAT reclaim process, VAT IT helps identify and address VAT recovery pain points so your business can thrive while alleviating costs and reclaiming your time, humans, and money.