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You have done your bit as a responsible business owner and submitted your VAT returns well in time.
But now your VAT refund is stuck with the FTA, which is affecting the working capital in your business.
Do you want to get your tax refund as soon as possible?
Today I will explain 7 reasons why your tax refund could be delayed and what you can do about it.
Let’s dive in.
1. Working with an unlicensed tax agent
Hiring a bookkeeper is a cost-effective way of managing the day-to-day finances of your business. But they don’t have specialist knowledge when it comes to navigating the nitty gritties of VAT law.
This means the finer details of filing your returns can slip through the cracks, such as:
- Filing and submitting the wrong paperwork, or
- Overlooking miscalculations and mistakes in your refund application
That’s why, if you’re a serious business owner, you need a professional, licensed tax agent.
Professional, licensed tax agents not only have the appropriate depth of knowledge of VAT law, but they also have access to a network of other accounting professionals who can support them in serving you.
Business arrangements and transactions can be complicated. And a licensed professional can help you cover all your bases.
2. Incomplete paperwork and missing information
When you file your returns, every little detail has to be scrutinized for compliance and completion. Sharing incomplete information with the FTA will push your submission to the bottom of the stack, leading to unprecedented delays in receiving your refund.
3. The names on submitted invoices don’t match your company name
This is a common mistake made by most businesses.
In the fast-paced business landscape, transactions happen at lightning speed. And, this inevitably leads to incorrectly filled invoices with long-term side effects.
Our advice? Just do yourself a favor and always claim invoices in your company’s name.
Sometimes real estate invoices are issued under your property management company’s name rather than your personal company’s name. In this case, make sure invoices are in your personal company’s name to save yourself the headache and get your tax refund faster.
4. Submitting invoices of personal expenses
You and your business are separate legal entities. The reason you incorporated in the first place is to protect yourself and your personal assets.
5. Submitting invoices not related to the nature of the business
Submitting invoices for unrelated expenses that don’t participate in the value creation of the product or service your company provides is an easy and costly mistake to make.
In fact this may lead to a surprise audit of your business.
Working with a licensed tax professional makes sure you have complete clarity about these aspects of your business. This makes your tax filing and refund process smooth and hassle free.
6. Accounting for security deposits as standard-rated supplies or zero-rated supplies.
You must know how your business is utilizing security deposits to account for them properly in your VAT filing documents.
For example, let’s say your customer gives you a security deposit for one of your products. If you plan to provide that security deposit back to the customer once they return your product safely, you do not have to pay VAT.
7. Errors and Irregularities
Most errors and irregularities in filing documents arise due to lack of coherent processes for recording business financials.
As a result, you not only leave money on the table due to delayed refunds, you may also incur fines.
A great way to avoid getting into tight spots like these is to work with an experienced and informed tax professional. They can adapt to your business processes and help you establish systems for recording and accounting all your business financials.
Filing for VAT and getting refunds on time doesn’t have to be a confusing and painstaking process.
A licensed tax professional can help you identify blindspots, give you clarity about exceptions, and support you with sustainable processes that can make filing and getting refunds effortless.
If you found this information helpful, please feel free to share it with your friends, and colleagues.