Following the decision of the House of Lords in the Fleming VAT case earlier this year, VAT-registered businesses that have either failed to claim back VAT on expenses incurred before May 1997, or charged too much VAT before December 1996, can apply to HM Revenue & Customs to reclaim that VAT, together with statutory interest.

  Accountants at Cowgill Holloway are reminding North West businesses that the deadline for making these claims is 31 March 2009. After this date, any VAT that was unclaimed before May 1997, or over-charged before December 1996, will be lost. Claims can go as far back as the date when the business was first registered for VAT. This means that, in some cases, claims could therefore go back to 1973, when VAT was first introduced.

  Commenting on the opportunity for reclaiming VAT, Gary Scully, VAT consultant at Cowgill Holloway, said: "Many businesses stand to benefit from this opportunity and should consider if they have over-charged VAT or failed to reclaim VAT on some expenses in the past. If they have been VAT-registered for a sufficient period of time, they may be entitled to a refund. In some cases, the interest payment could be in excess of the VAT claimed, so even a relatively small annual claim could add up to a significant windfall.

  "Generally speaking, businesses that may benefit include those that have historically not reclaimed VAT on bad debts, staff entertainment or staff mileage. Non-exhaustive examples of specific sectors that may be able to submit claims include operators of gaming machines, hotels, suppliers of takeaway food and providers of temporary staff. Non-profit-making bodies that are registered for VAT, such as charities, theatres, galleries and museums, could also qualify for a refund.    

  "Although the deadline for submitting claims is 31 March 2009, we recommend that those businesses which might be affected act now to identify any VAT that they can claim for. This will allow sufficient time for claims to be calculated and verified before the due date."

  Businesses may be concerned that they do not have records for periods before these dates. HM Revenue & Customs acknowledge that this can be a problem, and therefore will accept calculations based on figures in annual accounts, if records are not available for those years.  

If you would like to discuss this matter further or would like help with making a claim, please contact Gary Scully, VAT consultant at Cowgill Holloway, on 01204 414243 or email gary.scully@cowgills.co.uk