At The Peek Partnership, we specialise in helping businesses optimise their finances and reclaim funds they are rightfully owed. Recently, we successfully recovered a £716,616 VAT refund from HMRC for one of our clients, including interest, after identifying and correcting VAT overpayments from previous years who had unknowingly overpaid VAT across multiple reporting periods.
The Challenge
Our client had been managing their VAT filings in compliance with HMRC regulations but was unaware of historical discrepancies. By mid-2023, the directors recognised the need for expert financial management to support their expansion. They engaged The Peek Partnership to address several key challenges, including the implementation of comprehensive accounting systems, improving financial reporting, and identifying opportunities for financial recovery.
Our Approach: Identifying and Recovering VAT
In July 2023, we began our partnership with the company, providing tailored accounting services to meet their specific needs. Our approach included:
Conducting in-depth consultations with the directors to understand their business model and operational framework.
Designing and integrating customized accounting systems to streamline financial operations.
Reviewing historical financial data to identify inefficiencies and uncover financial recovery opportunities.
A major success was the identification and successful recovery of £717,000 in VAT from HMRC, which had previously gone unrecognized by the client. This recovery significantly improved the company’s liquidity and provided much-needed financial relief.
- 16/11/2022 – 31/03/2023 : £71,423
- 01/04/2023 – 30/06/2023 : £347,584
- 01/07/2023 – 30/09/2023 : £252,062.28
- 01/01/2024 – 31/03/2024 : £36,229.73
Additionally, HMRC approved £9,317.62 in interest for the repayment, bringing the total refund to £716,616.
Claiming VAT from Previous Years: The Process
Under HMRC guidelines, businesses can reclaim VAT overpayments for up to four years, provided they can submit an Error Correction Notice (ECN) with supporting documentation. Given the nature and timeframe of the payments, we followed a structured approach:
- Data Reconciliation: Conducted an in-depth review of VAT returns, invoices, and accounting records to verify discrepancies.
- Error Correction Submission: Prepared and submitted a comprehensive ECN to HMRC detailing the adjustments required.
- HMRC Review and Validation: Worked closely with HMRC to provide additional documentation and clarification as needed.
- Refund Approval and Processing: Successfully secured the full refund, including statutory interest, which was credited to our client’s account.
Outcome and Impact
On 16/10/2024, HMRC processed and credited the full refund amount to our client. This recovery provided an immediate improvement to cash flow and enabled the client to reallocate resources more effectively.
Why The Peek Partnership?
This case study underscores the importance of regular VAT audits and the potential for businesses to reclaim significant funds through diligent financial oversight. At The Peek Partnership, we specialise in tax recovery, compliance, and strategic financial consulting, ensuring our clients maximise their financial efficiency.
If you suspect VAT discrepancies in your past filings, our team is here to help. Contact us today to explore how we can assist in optimising your tax position and recovering any overpaid VAT.
