Modular VAT reviewvat pyramid

There are numerous rules for determining when the VAT incurred on expenditure can be reclaimed. This makes this a prime area of interest for HMRC during a VAT inspection.

It is easy for a business to miss out on VAT reclaim opportunities because it is seen as easier not to claim any VAT on certain expenditure, than it is to calculate the entitlement.

At the other end of the spectrum VAT is often reclaimed that is only partially recoverable, or subject to a complete block.

The greater threat to the business is that this is an area where minor errors can occur and be repeated many times, for example errors in staff expense claims, mobile phones and entertainment.

A number of relatively minor errors can be used by HMRC to present the case that the business has failed to take reasonable care. This can greatly increase the likelihood and scale of penalties.

A review of expenditure and expenses policy will mitigate the risk of penalties, avoid errors being compounded on regular transactions and can identify opportunities to increase VAT recovery.

  • Business/Non-business/personal use
  • Expenses – cars, phones, scale charges, entertainment apportionmentThe expenses part could be a stand-alone module, certainly a chunk of it could be pre-drafted and tailored to each business

By adopting a modular approach to your VAT review you are able to take control so you can:

  • focus on the specific areas of risk
  • address your VAT concerns
  • manage/spread the cost of the review
  • control the timing of each module so you can prioritise key modules and schedule the progress of the review to fit in with your business

Next steps

Get in touch today to discuss how we can work with you to keep VAT becoming a headache for your business. Our modular VAT review is comprised of the following elements which you can pick and mix over an agreed period of time. The only mandatory element is module one which is the initial scoping element.


Call us on 0115 778 8533 for a free consultation.