Motorsport organisations move fast, often working across multiple jurisdictions throughout the season. Expenses incurred through international suppliers are material and attract significant foreign VAT. Manual reclaim processes are complex, time consuming, and leave room for error, but failing to recover VAT on expenses has a real impact on ROI in the industry, with many motorsport companies missing the opportunity to reclaim up to 25% on projects abroad.
Why VAT on motorsport expenses is neglected
Operating in worldwide markets requires expertise in legislation, foreign language support and relationships with the local tax offices to effectively manage the VAT refund process. For finance teams already stretched by reporting deadlines and cash flow management, VAT recovery can feel like a low-return task.
When each country has its own specific deadlines and rules with different administrative filing practices, the safest option often seems to be doing nothing – even if that means leaving recoverable VAT on the table.
Common reasons businesses miss recoverable VAT on motorsport expenses include:
- Uncertainty around deadlines and eligibility
- Time consuming processes that are prone to error
- Lack of visibility into where VAT is being incurred
- Complex and inconsistent local rules across jurisdictions
Individually, VAT costs seem small, but with $30 billion in VAT going unclaimed each year, these costs accumulate to have a significant impact on ROI.
Eligible expenses
Motorsport companies can reclaim VAT on foreign and domestic travel and expenses, AP supplier invoices, and intercompany expenses for motorsport companies, including:
- Accommodation (guests and own employees)
- Meals (guests and own employees)
- Grand Prix admission passes
- Hire of circuit/ testing
- Fuel for trucks used to transport vehicles
- Road tolls
- Petrol for racing cars
- Spare parts/ repairs
- Events for partners and sponsors
- Miscellaneous business expenses
Benefits of automated VAT recovery for motorsports
Automated VAT recovery eliminates the VAT burden, providing real-time visibility every step of the way. Instead of reviewing every invoice manually, automation helps identify which expenses may be recoverable, flags missing information early, and keeps everything organised in one place.
For finance managers, this means:
- Less admin and fewer manual checks
- Better visibility of VAT sitting in costs
- Fewer missed deadlines
- More confidence in the reclaim process
VAT recovery doesn’t have to be complex to be valuable. In motorsport, where spending is frequent and international, an effective VAT recovery process can run quietly in the background, helping to unlock real cash flow.
How Fintua helps
Fintua has crafted a streamlined and cost-effective VAT recovery solution, customised for the motorsport industry. Recover increases foreign VAT reclaim by an average of 50% and uses advanced analytics to deliver prescriptive insights that help improve reclaim every year.
With over 25 years’ experience dealing with all global tax jurisdictions. We understand all of the local VAT practices in over 180 countries to guarantee maximised VAT refunds on motorsport spend.
Get a complimentary VAT recovery analysis
Fintua understands the need for clients to minimise risk and costs for outsourcing processes. Our complimentary VAT recovery analysis identifies missed recovery opportunities quickly and accurately, giving you clear insight into what can be reclaimed and where to focus next.
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Authors
Sinéad Power
As a Marketing Assistant at Fintua, Sinéad creates content to help businesses navigate the evolving indirect tax landscape.
