7 common VAT mistakes that VAT consultants warn against

Harry Jonson

It's common to have issues related to the VAT while running an organization. This primary happens either a business doesn’t have the proper system in place or because of certain complication. If you don't allocate sufficient funds to pay your VAT bill, then this can result in a severe cash flow crises. To avoid such situations, many firms appoint VAT consultants to take care of this aspect of the business.

You can also avoid the mistakes by ensuring that you check all the paperwork multiple times. That involves keeping accurate VAT records, issuing VAT invoices with the exact date or "tax point", retaining them from suppliers, handling the process of your VAT return filing on a timely basis and so on.

Now let’s check out the common mistakes that businesses make while dealing with VAT.

Not having the appropriate evidence to support VAT reclaims
The general rule for claiming back the VAT that companies should abide by is, No VAT receipt, No claim.
Now even where you get a VAT receipt, you have to ensure that the item you purchased is charged with VAT. Although there are some exceptions to this system, still you shouldn't take risks anyhow.
Claiming back VAT on non-business use expenses
Where you've incurred expenses (for example, broadband at home) which are partly business and partly personal, you would often find that VAT has been claimed on the full amount instead of applying a restriction on the personal or non-business element of the expense.