RSM Tenon urges firms to claim tax refunds

BUSINESS owners across the North West could be missing out on thousands of pounds in tax refunds, according to RSM Tenon.

The accountancy firm is now advising companies to monitor a possible change in legislation which will allow UK firms to claim back VAT payments on entertainment expenses over the past four years.

Currently, a business cannot reclaim VAT on ‘business entertainment’ but can claim it back on ‘subsistence’.

Entertainment is defined as any kind of free or subsidised entertainment or hospitality to non-employees.
 
John O’Mahony, head of tax in the North West at RSM Tenon, said: “Although it’s tempting not to think about a year once it has been put to bed and all returns have been made, it is worth revisiting when opportunities come along, especially in the current economic climate where cash flow is still tight.

“We are urging all businesses in the North West to dust off their old VAT returns and seek advice on whether they can potentially make a claim.

“This should be good news for businesses, and HMRC should be bracing itself for a deluge of retrospective tax claims.

“Businesses must take action – it is an excellent opportunity which has come at a time when they are facing tighter regulations and higher tax payments.”

RSM Tenon’s ‘business barometer’ – which surveyed 300 firms across the region – has also established that 18% of North West business owners never revisit their tax returns once they are filed.

Furthermore, 15% of companies in the region are unaware of the time limits relating to retrospective claims.