Recovering lost insolvency VAT


Recovering lost insolvency VAT

With expert guidance, submitting VAT Bad Debt Relief (BDR) claims can be both successful and straightforward. To Twice2much it is one of several starting points for squeezing crucial lost income out of insolvent estates.

Because the concept of Crown Set-Off applies in insolvency, IPs may be tempted to think that preparing and submitting a large BDR claim or a large Terminal Loss Relief claim is both daunting and ultimately futile.

Not so. As a skilled recovery audit company, Twice2much is experienced in making rejected claims from HMRC a thing of the past. The simple starting point is data.

Profits in the detail
Data is the gateway to a series of lost revenue streams. Twice2much has developed a unique and innovative expertise in identifying hidden overpayments through sophisticated data analysis, to the extent that it works confidently on a no-win, no-fee basis.

Businesses often unknowingly make excessive payments in property rates that can be recovered. The same applies to rent deposits which are easily overlooked or simply dismissed.

The insolvency system also allows considerable scope to recoup overpayments to suppliers where no set-off arrangements exist. However, a major opportunity for 'lost profit' recovery can be found in reclaiming VAT Bad Debt Relief and Terminal Loss Relief (TLR) from HMRC where set-off does exist.

Complexity made easy
The complication that deters many IPs is the fact that Crown Set-Off applies to insolvencies.

As most practitioners are aware, the concept of set-off was devised as a statutory defence to the whole or part of a plaintiff's claim with the aim of relieving insolvency debtors. However, it can only be pleaded for mutual debts of a defined character.

This means that in certain situations, a claim and counter-claim between two parties can be replaced by a single net sum owing.

The rules on claiming back VAT Bad Debt relief are usually quite clear. However, it is where this moves into insolvency that Twice2much is able to help IPs navigate successfully around the additional requirements.

'It is understandable that IPs may be deterred by a large Crown debt,' explains Twice2much Commercial Director, Philip Fernandes.

'With all VAT BDR, you must have already accounted for the VAT on supplies and paid it to HMRC.'

'In addition, the debt must not have been paid, sold or factored under a valid legal assignment. It must have also remained unpaid for a period of six months after the later of the time payment was due and payable and the date of the supply.'

'Finally, you must claim within four years and six months of the later of, when payment is due and payable or the date of supply.'

More demanding
That part is quite easy. However, in an insolvency scenario there are certain other factors that can impact directly on the ability of IPs to claim BDR or TLR successfully. This is where Twice2much's support can be essential.

'We are very happy to discuss individual cases in confidence on a one-to-one basis,' Philip adds.

While individual circumstances are often unique, the sums to be recovered are frequently substantial and the potential for success is very high.

Not only that, but all this work is done on a contingency basis. If Twice2much don't recover anything, they don't get paid a bean!

In the months ahead, Insolvency Solutions will carry a series of illustrative Twice2much case-studies to show what can typically be achieved both with VAT BDR, TLR and other forms of lost profit recovery.

For more information please contact Philip Fernandes

The Marketing Innovation Group Ltd.
PO Box 427, Knutsford,WA16 1EH
Registered in England & Wales. Company No. 06963849.