VAT professionals generally identify VAT service providers as either consulting firms, that assist with providing tax opinions and compliance functions, or VAT reclaim companies, that assist in getting money back from the revenue authorities.
But where exactly do VAT technology providers such as VATSURE fit into this picture? Our recent blog article compared how VATSURE compares to the Big 4 auditing firms, now we we’ll look at what differentiates us from the VAT reclaim companies.
VAT reclaim companies primarily focus on reclaiming money from various tax authorities on business expenses relating to employee travel and entertainment expenses, to countries like the UK, or continents such as Europe and Australia.
All the documentation relating to your businesses’ foreign travel, such as hotel, restaurant and transport bills are collated and handed over to the VAT reclaim company. These companies have an extensive understanding of the claims process in the various jurisdictions in which they operate. They are thus equipped to handle all the administration and can work through the proverbial red tape around the submission of these claims.
In terms of local VAT reclaims, this is done through a review of supplier invoices. An extensive review is done of all supplier invoices to determine if any input VAT should have been claimed and was not, or if the input VAT can be claimed earlier.
The fee structure of the VAT reclaim companies is generally on a contingency fee basis, based on the value of the amount they have managed to claim back. The range of the fee can vary from between 20 to 50% of the amount claimed back on your behalf.
In comparison, VATSURE is a solution that businesses can subscribe to, and the cost is driven by licenses acquired to use the software. The aim is to provide a solution that benefits the user and enhances their VAT data and compliance management. The focus is on ensuring that the VAT information within your system is accurate and continuously analysed to ensure that the data is sound, and any errors, or patterns in errors, can be identified timeously and resolved.
One aspect of the solution is that you can continuously identify your own potential cashflow opportunities in the form of earlier input VAT claims that were previously delayed or missed, without having to worry about giving a portion of those savings to a third party. VATSURE is not aimed at fulfilling an administrative function of compiling documents, but rather giving businesses the power and capability to understand their data better.
As with the Big 4 auditing firms, there is a time and place for the VAT reclaim firms, but should your objective be a technology and data-driven solution for your VAT risks and processes, VATSURE is the provider to consider.