How Automated Spend Management Can Help Financial Services Reclaim VAT

At SAP Concur, we work with many businesses in the financial services industry. The more we understand their challenges, the easier it is to spot some common trends. One example? They rarely reclaim VAT. We spoke to Sarah Carter – one of our Solutions Specialists – to find out why…

When you understand the complexity of reclaiming VAT, it’s not surprising that many businesses avoid it entirely. A partial exemption on certain types of spend – commonly seen in the financial services industry – can make reclaiming eligible VAT a complete headache for finance teams. In addition, executives are understandably risk adverse when it comes to their HMRC reporting responsibilities.

Now, don’t get me wrong, I understand that the amount of reclaimable VAT available in a business with a partial exemption, is small. Especially when compared to the potential fine for incorrectly stating your VAT position. It’s unlikely a Tax Manager would take the risk, especially if all your spending is managed through a paper-based process.

But consider this… if your annual travel and expense spend is £5m – and you can reclaim VAT on just 20% of that – that’s £200,000 waiting to be claimed. It’s time to start thinking about how to claim that VAT without compromising your fiducial integrity.

If you’re raring to go, it all starts with data. 

Data allows you to make better decisions across all areas of your business, including whether you should be reclaiming VAT.  If you know what someone spent, where and when they spent it, and if you have a record of appropriate evidence, the lives of your finance team become much easier.

So, how can you get the required data from your workforce? Make it easy for them to provide it. 

What if they could take a photo of their receipt? What if it was then read, matched to a credit card charge transaction and uploaded to an expense claim automatically? That’s what automated spend management provides. The only step your time-poor employees need to take, is to review the claim and press submit. And they can do this on the move, from their smartphone, whilst waiting for their 6.12pm train home from Waterloo to Basingstoke one evening.

Minimal impact on your workforce, maximum benefit for your business.

At SAP Concur, we provide an audit service to many financial services clients to help them identify reclaimable VAT. They’re then able to work with one of our partners to begin the reclaim process and put money back in their budget. It really is that simple.

Visit our compliance page to see how SAP Concur can help you reclaim VAT, or visit our financial services page to see us at work in your industry.