Case Studies
Case Study: A Bank Group Head Office
The Problem
The Banking Company X is one of South Africa’s largest financial services groups offering a complete range of banking, assurance and wealth management products and services. Previously, Banking Company X Bank was writing off their International VAT as part of their UK expenses, rather than claiming back their UK VAT. VATit was appointed to help them recover this UK VAT from HM Revenue and Customs (HMRC) under the 13th Directive of the UK VAT Act. Complications arose because HMRC had already rejected Banking Company X’s claims for UK VAT refund, since they had declared Banking Company X Bank to be a VAT-exempt organization.
The Solution
Since Banking Company X was blocked from recovering its UK VAT, VATit’s technical specialists investigated all the possible alternatives. The results of this investigation revealed that since Company Y Bank (UK) had acquired a 55.52% shareholding in the bank, Banking Company X was technically part of the Company Y UK VAT Group. This meant that Banking Company X could legally claim its UK VAT expenses under Company Y’ local UK VAT return. As a result, VATit now performs a full invoice retrieval service for Banking Company X on a quarterly basis, submits the supporting invoices to Company Y, and then ensures that the local return is passed on to Banking Company X from Company Y via detailed follow-ups.
The Benefits
Since VATit helped Banking Company X to claim their UK VAT through Company Y, Banking Company X has been able to recover all of its UK VAT since the beginning of 2009. At any time, Banking Company X can track their claims with full transparency, thanks to VATit’s “Dragon” claim monitoring and tracking system. In addition, Banking Company X now receives their UK refunds within three months as opposed to receiving their refunds via the 13th directive (if it was possible to do so) that would take in excess of six months.