VAT RECOVERIES: ARE YOU RECOVERING EVERYTHING YOU ARE ENTITLED TO?

Published: 09 October 2026

Author: Tender Da Gama

Reading Time: 5 minutes

A VAT return does not necessarily tell the entire story.

A business may be submitting its VAT201 returns correctly while still having historical transactions that require further review.

Input tax recovery depends on the nature of the transaction, its intended use and the relevant documentary requirements. Historical input tax claims are also subject to a five-year prescription period, making the timing of a review important.

The invoice is only the beginning

Finding an invoice showing VAT does not automatically mean that the VAT can be deducted.

The business needs to consider:

whether the supply qualifies;

whether the expense relates to taxable supplies;

whether the required documentation is available;

whether the VAT was correctly charged;

whether any restrictions apply; and

whether the claim is being made within the permitted period.

Where recovery reviews can help

A structured VAT recovery review can examine historical transactions to identify:

missed input VAT;

incorrectly coded expenses;

inconsistent VAT treatment;

documentation gaps;

recurring errors; and

transactions requiring further review.

The objective is not simply to find more VAT to claim. It is to determine whether the business's VAT recovery process is operating as it should.

Look for patterns

One missed invoice may not be significant. But if the same type of expense is processed incorrectly every month, the issue becomes much more important.

For example:

One incorrect VAT code = one transaction.

The same incorrect VAT code applied across 36 months = a process issue.

That is why VAT reviews should look for patterns rather than isolated transactions.

Recovery and governance

A well-managed VAT function should know:

what is being claimed;

what is not being claimed;

why certain expenses are restricted;

where documentation is missing; and

where recurring exceptions exist.

This information can also help improve future VAT compliance.

A useful question for finance teams

When was the last time your business reviewed its historical VAT treatment independently of the normal VAT201 preparation process?

If the answer is “never”, it may be worth asking why.

The objective of a VAT recovery review is not to claim VAT simply because it was paid. It is to establish whether the business has correctly identified and supported the input tax it is legitimately entitled to deduct, while taking the five-year prescription period into account.

TCS Advisory & Compliance can assist with VAT reviews, recovery assessments, compliance processes and broader tax support.