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We both know how important it is to get VAT returns right, if you fail to collect documentation then you won’t be able to reclaim VAT, affecting your bottom-line.
Then there’s the scary stuff. If you file an inaccurate VAT return, you must inform HMRC which can lead to an inspection, where you can face penalties of up to 100% of any tax under-stated or over-claimed.
Fortunately, expense management tools can help you to streamline processes, and reduce human error, to boost your VAT return on business expenses. Because the best systems are easy to roll out, you can lay the foundations for maximising your VAT return
Keep reading to learn how they can help.
Streamline your VAT processes
If your staff make a lot of purchases, then there’s more receipts to capture, and data to manage, increasing the likelihood of errors, missing documentation, and ultimately inefficient VAT processes.
The manual nature of traditional expense management, with paper receipts, expense reports, manual entry, and VAT coding, doesn’t help.
Fortunately, expense management systems stop this; prompting workers to capture receipts when they use their expense cards to make purchases, so receipts are captured, and expense transactions are documented. They also eliminate expense reports and reimbursements, for happier teams.
They also free up to time to read any new HMRC VAT notices, so you can amend your processes, and schedule in your annual VAT compliance review.
Check out our article on removing VAT return bottlenecks.
Reduce errors
Are you afraid of making a VAT return mistake? Many workers are, so it goes without saying that streamlining your VAT return, will reduce stress and in turn help to prevent human error.
Expense management systems log VAT during receipt capture, and integrate with your accounting software, removing the need to manually enter VAT codes and preventing mistakes.
They can also prevent expense report errors, saving you some serious time. In fact, one in five expense reports contain errors, taking an average of eighteen minutes to correct, according to the Global Business Travel Association.
To learn more read our expense management guide, to learn how they can reduce admin, and prevent expense disputes and fraud.
Track user journeys
If your workers pay for their own mileage and use their personal cars for company purposes; VAT can be claimed on their mileage expenses, including fuel and wear and tear. While workers using company cars can claim fuel expenses for business use. So, it’s vital to track staff journeys so you don’t miss out on VAT.
Fortunately, expense management systems like accountabl log user journeys , recording the purpose, origin, the destination of the trip, and capture any associated receipts. It also allows admin users to set mileage allowance payments according to their mileage reimbursement and vehicle types, for accurate payments.
Secure data storage
Effective VAT returns and expense management, depends on great record keeping. Paper documentation is cumbersome and can go missing costing you on your VAT reclaims. So, it's a good idea to use expense management systems that allow you to store data securely in the cloud.
Storing your data digitally can also simplify your annual VAT audits depending on the system you choose. For example, accountabl stores information securely in the cloud for 7 years.
They protect your bottom-line
Ultimately expense management systems help to protect your bottom-line, by storing the data you need for deducting input VAT, on your VAT return.
Boosting your VAT process improves accuracy and prevents costly surprises, and frees up the finance team, so they can focus on more valuable work. Which is vital, when 40% of finance workers want to quit, due to excessive low-value tasks according to a YouGov study.
See for yourself and start maximising your VAT returns, with a 30-day free trial of accountabl.
