The research from business software provider Sage also reveals that more than half of business owners (52 per cent) that think they are missing out on VAT estimate they are losing more than £500 every year by not claiming for everything they are entitled to.
Introduced in 1973, VAT is a sales tax charged on most goods and services bought in the UK and accounts for £100 billion paid to HMRC every year.
All businesses that turn over more than £79,000 each year need to be VAT-registered. However, many businesses have not got to grips with the ever changing complexities of VAT, with nearly 30 per cent of the 1,000 business owners surveyed suggesting that a deeper understanding of VAT would help make their firm more profitable.
The research reveals that the most popular items to claim back VAT on are stationery, printer ink, telephone contracts and computers/laptops, with fuel as the eighth most popular item.
Just under three quarters of the businesses surveyed (71 per cent) cite travel as their biggest cost, while for almost one in ten it is food or refreshments.
Fuel and tea/coffee and biscuits in a business context are all VAT-reclaimable, and could save businesses hundreds of pounds each year.
Lee Perkins, managing director of Sage’s small business division says, ‘Businesses that aren’t claiming back the VAT they are entitled to are really putting themselves at a competitive disadvantage.
‘Despite being around for 40 years the ever changing nature of VAT has put many business owners off from digging into VAT and fully understanding what can be refunded.’
Download a free guide to VAT
Sage has put together a comprehensive guide to VAT, with everything you need to know about registering with HMRC to submitting VAT returns and staying compliant. Download the guide.
Further reading on VAT
