Reclaiming VAT from 1973-1997 - deadline looming for applicants

   

It's not often that companies can claim anything back from the tax man, but many businesses could be missing out on claiming VAT rebates over a 24 year period from 1973 to 1997.

In April, we posted an article stating that companies have until 31st March 2009 to reclaim VAT they may have overpaid during this period.

This opportunity stems from a decision in the House of Lords in January this year which said that the introduction of a “three year cap” on back-dated claims in 1996 was invalid in so far as it failed to include transitional arrangements for taxpayers making any claims relating to periods prior to May 1997.

KPMG has warned that companies may risk running out of time to apply for refunds with the deadline getting every closer. Such claims typically take many months to compile and agree, and in many cases it may be hard to find and produce the relevant records from past years.

Stuart Hindle, indirect tax partner at KPMG in the UK, said:

“The door is open for 24 years worth of VAT claims – from 1973 when the UK joined the EU to 1997 when the law was changed.

“Many companies whom we have spoken to about their eligibility to submit claims were previously completely unaware that the opportunity even existed – perhaps because 1997 is so far away.

“The sums at stake are often substantial: we have seen claims ranging from £50,000 to several million pounds. And this could make a huge difference to whether a business makes it through these difficult times or not. Because of the opportunity exists to go back so far, even small amounts that are under-claimed in any one year can be significant if it is extended back in time.”

• Free online guides to small business tax from HMRC