Client Type: E-commerce Seller
Jurisdiction: United Kingdom
Period Covered: 2020–2022
Consultant: Prosperlytics Consultants
Client Background
A US-based e-commerce seller had previously filed their UK VAT returns through a third-party consulting firm. However, the seller had concerns regarding the accuracy and completeness of the filings.
Engagement with Prosperlytics
Prosperlytics was initially engaged by the seller for bookkeeping services. In early 2024, during routine discussions, the topic of UK VAT compliance was raised. Upon recommendation, the seller authorized Prosperlytics to review and audit previously submitted UK VAT returns for the period 2020–2022.
As a one-stop solution for international sellers, Prosperlytics offers complete support in accounting, taxation, and regulatory compliance—minimizing the need for clients to engage multiple service providers.
Our Approach & Solution
Upon receiving the seller’s approval, Prosperlytics undertook a comprehensive VAT audit. We requested and reviewed all relevant documentation and backups from both the previous consulting firm and the seller, covering the entire period from 2020 to 2022.
Our audit included a detailed analysis of:
- Output VAT and reported sales
- Input VAT, including import VAT and domestic purchase VAT
During this process, we discovered that GBP 41,000 of input VAT had not been claimed in the original returns. Notably, GBP 8,500 of this amount related to import VAT tied to shipments filed under an incorrect EORI number.
To resolve the issue:
- We contacted HMRC to correct the EORI discrepancy
- Submitted updated documentation
- Successfully reclaimed the unclaimed input VAT
Result
- Recovered GBP 41,000 of unclaimed VAT from HMRC
- Ensured that all historical VAT records and returns were accurate and fully compliant with HMRC regulations
- Helped the client establish a clean and compliant foundation for future UK VAT filings
- Minimized risk of future regulatory issues
Conclusion:
Through proactive review and diligent handling, Prosperlytics not only secured a substantial VAT recovery for the client but also reinforced the importance of maintaining accurate VAT records—especially for international e-commerce sellers operating in the UK market.