As an SME VAT accounting is a real pain – and it is huge pain without just reward. I am a consultancy company and all my customers are overseas. I am therefore unable to reclaim VAT incurred on my overseas expenses and for most of my non-EU customers – I dont charge VAT. Why can I not reclaim this VAT through the normal VAT accounting process. We should be making it easier for service exporters.
I have just spent 4 whole days working on my financial records so that I can submit my VAT return on time. What a nonsense for the small and insignificant results.
Why not have a simplified and/or exemption process where companies like mine are always claiming rebates. I feel like I am being penalised for being an exporter of services.
Why is this idea important?
The country is looking for exporters of services to be successful as a way of helping UK PLC climb out of recession. The current VAT processes penalises exporters of services. The VAT submission process seems simple on the face of it but what is not seen is that your normal accounting processes need to be up to date and are far more complicated than they need to be – all driven by VAT accounting rules.
VAT is a pass through tax and does not improve the bottom line performance of my company. I am effectively being used as an unpaid Tax Collector !! In my case even worse – an unpaid Tax rebater. The Government making 3 months interest on the money it owes me !! Absolutely crazy !!