Tax & Accounting News

Act now on VAT reclaim

30/03/2009

Time is rapidly running out to reclaim input VAT on business expenses for entertaining foreign clients going back as far as 1973.

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. The deadline to lodge claims with HMRC is 31 March 2009.

Claims can be made going as far back almost 40 years following HMRC’s January 2008 defeat in the cases of Fleming and Condé Nast, concerning a three-year cap on VAT adjustments.

After that ruling, HMRC gave businesses until 31 March to reclaim under-claimed input tax (the VAT paid to suppliers) for accounting periods ending between 1 April 1973 and 1 May 1997 or over-paid output tax (the VAT added to the cost of a business’s own products or services) between 1 April 1973 and 4 December 1996.

Claims submitted will need to include:

• details of the overseas clients;
• the type of expenditure, e.g. meals, drinks, sporting events
• the amount of VAT claimed
• evidence to support the fact that the VAT had not previously been deducted.

For further information and advice on any VAT issue, please contact us.

 

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