More than a third (36%) of small to medium sized businesses (SMBs) are missing out on savings as they fail to claim back the VAT they are entitled to.
New figures from Sage found that 52% of these businesses are losing more than £500 every year.
All businesses that turn over more than £79,000 a year need to be VAT registered, but many are confused about the items they can claim VAT back on.
The most common items to claim money back on are stationery, printer ink, telephone contracts and computers. However, many small businesses are unaware they can also claim money back on fuel and refreshments used for business purposes.
Nearly 30% of business owners said their company could be more profitable if they had a better understanding of VAT.
Lee Perkins, managing director, Small Business Division said “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. But it needn’t be a big task, the software exists today that can make claiming money back from HMRC a five minute job. Businesses need to get their VAT sorted now.”