Automated Tax Recovery Calculator

Most business owners track the wrong number. You see a receipt for £120 and log £120 as an expense. But if that £120 included £20 of VAT you can reclaim, your actual business cost was only £100.

Tracking gross amounts instead of net costs isn’t just a bookkeeping headache—it distorts your financial picture and makes you miss potential tax refunds. Worse yet, manually calculating whether prices are tax-inclusive or tax-exclusive for every coffee, software subscription, and office supply purchase? That’s a productivity killer.

Portmoneo’s new Tax Recovery Calculator solves this automatically. Using on-device AI, it extracts tax information from every receipt, intelligently handles both tax-inclusive and tax-exclusive pricing, and gives you a crystal-clear view of your true net spending—all while keeping your financial data private and secure.

The Hidden Cost of “Gross” Expense Tracking

When you only track the final bill amount, three critical problems emerge:

1. You Overestimate Your Expenses: Recoverable tax gets counted as business costs, making your budget appear tighter than it actually is.
2. You Miss Deductions: Come tax season, scrambling to find exactly how much VAT or sales tax you paid leads to guesswork or missed refunds entirely.
3. You Don’t Know Your True Costs: Understanding whether prices include tax or not changes everything—a £120 receipt could mean £100 net (inclusive) or £100 + £20 tax (exclusive).

Traditional receipt scanners fail here. They see “Total: £120.00” and stop. They don’t parse whether that £120 already includes VAT or if tax needs to be calculated separately. They certainly don’t extract tax rates or identify pricing models automatically.

How Portmoneo’s Tax Recovery Calculator Works

Portmoneo’s latest update introduces an intelligent Tax Recovery Calculator that goes far beyond simple OCR. Our on-device AI understands the structure and context of receipts.

Automatic Tax Extraction

When you scan a receipt, the AI now:

• Hunts for Tax Keywords: Searches for “VAT”, “GST”, “Sales Tax”, “TVA” (French), “MwSt” (German), “IVA” (Spanish), and more across 10+ languages.
• Extracts Tax Rates: Identifies percentage values (20%, 5%, 0%) and converts them to decimal format automatically.
• Detects Pricing Models: Determines whether the receipt shows “VAT Included” (tax-inclusive) or “VAT Exclusive” pricing—crucial for accurate calculations.
• Assigns Tax to Line Items: Matches tax amounts to specific products or services, not just the total.

All of this happens locally on your device. Your financial data—including sensitive tax information—never leaves your phone unless you explicitly choose to sync it.

Intelligent Tax Calculation: Inclusive vs Exclusive

This is where most apps fail. Portmoneo correctly handles both pricing models:

Tax Exclusive (e.g., US receipts, some UK businesses):

• You see: £100 net + £20 VAT = £120 total
• Calculation: Tax = Amount × Rate
• Net cost: £100

Tax Inclusive (e.g., most UK/EU receipts, many restaurants):

• You see: £120 total “VAT Included at 20%”
• Calculation: Tax = Total - (Total / (1 + Rate))
• Net cost: £100 (recoverable tax: £20)

The difference matters. If you manually calculate £120 × 20% = £24 for a tax-inclusive receipt, you’d be wrong by £4. Portmoneo does this math automatically and correctly, every time.

Manual Correction Toggle

AI is powerful but not perfect. Receipts can be faded, handwritten, or ambiguous. That’s why Portmoneo gives you a safety valve:

1. Open any expense and tap Edit on a line item.
2. Toggle the “Tax included in price?” switch.
3. The app instantly recalculates net amount and tax using the correct formula—no server roundtrip needed.

This client-side recalculation happens in milliseconds. You can verify AI detection or correct pricing models on the fly, and your expense totals update immediately.

Real-World Example: Coffee Shop vs Software Purchase

Let’s see how this works with two common scenarios:

Scenario 1: Coffee Shop (Tax Inclusive)

• Receipt shows: “Total: £3.60 (VAT Included)”
• Portmoneo extracts: Tax rate 20%, pricing model: Inclusive
• Calculation: Tax = £3.60 - (£3.60 / 1.20) = £0.60
• Result: Net cost £3.00, recoverable tax £0.60

Scenario 2: Software Purchase (Tax Exclusive)

• Receipt shows: “Subtotal: £83.33, VAT: £16.67, Total: £100.00”
• Portmoneo extracts: Tax rate 20%, pricing model: Exclusive
• Calculation: Tax = £83.33 × 0.20 = £16.67
• Result: Net cost £83.33, recoverable tax £16.67

Both receipts show £100 totals, but the net costs differ. Portmoneo handles this distinction automatically, giving you accurate expense tracking and potential tax refund calculations.

Tax Data Quality Validation

To ensure accuracy, Portmoneo includes intelligent validation that flags potential issues:

• Tax Amount Consistency: Compares extracted tax against calculated tax based on rate and pricing model. Warns if there’s a significant discrepancy.
• Unusual Tax Rates: Flags rates above 30% as potentially incorrect (most jurisdictions cap at 27%).
• Missing Tax Detection: If receipt text mentions “VAT” but no tax was extracted, suggests manual review.
• Zero Tax Validation: Identifies cases where a tax rate exists but tax amount is zero (might be zero-rated or missing).

These validations happen instantly in the UI, giving you immediate feedback when editing line items. No need to wait for server processing or discover errors during tax season.

Privacy-First Financial Intelligence

Unlike competitors who upload your receipts to cloud servers for processing (yes, some services send your receipts to third-party APIs where humans might review them), Portmoneo processes everything offline:

• No Data Leaks: Your tax ID numbers, merchant details, and purchase history stay on your device.
• No Latency: Tax calculations and validation happen in milliseconds, not minutes.
• No Internet Required: Tax extraction works perfectly in airplane mode or poor connectivity.
• No Third-Party Exposure: Your sensitive financial data never touches external servers unless you explicitly enable cloud sync.

This privacy-first approach isn’t just a nice-to-have—it’s critical for business owners handling client receipts, freelancers with sensitive expense data, and anyone who values financial privacy.

Getting Started: Zero-Touch Automation

Using Portmoneo’s Tax Recovery Calculator requires zero setup:

1. Scan Your Receipt: Point your phone at any receipt with tax information. The AI automatically extracts tax rates, amounts, and pricing models.
2. Review & Correct: Open the expense if you need to adjust tax fields or toggle the pricing model. Changes recalculate instantly.
3. View Analytics: Navigate to the Analytics tab to see your total recoverable tax and effective tax rate across different categories and time periods.

For 90% of receipts, you’ll never need to touch a thing. For the remaining 10% with unclear or handwritten receipts, manual correction takes seconds—not minutes of spreadsheet work.

Why This Matters: The Financial Impact

Let’s talk numbers. If you’re a freelancer or small business owner spending £5,000 per month on business expenses with an average 20% VAT rate:

• Without tax separation: You track £5,000/month × 12 = £60,000/year as expenses.
• With tax recovery: Your actual net spending is £50,000/year, with £10,000 in recoverable VAT.

That £10,000 difference changes your financial picture entirely. It’s the difference between thinking you can’t afford new equipment versus knowing you have a £10,000 tax refund coming.

More importantly, Portmoneo’s automatic extraction means you never miss a deduction. That £3 coffee receipt gets its 60p VAT extracted automatically. Over hundreds of transactions, those small amounts add up to significant savings.

Start Reclaiming Your Tax Today

Don’t let recoverable tax slip through the cracks. Portmoneo’s Tax Recovery Calculator is available now in the latest app update. Upgrade today to unlock:

• Automatic tax extraction from every receipt
• Intelligent pricing model detection (inclusive vs exclusive)
• Instant recalculation when you need to correct data
• Privacy-first processing that keeps your data secure
• Zero setup required—it just works

Your receipts already contain this information. Portmoneo just makes it visible, accurate, and actionable. See what your business is actually spending, and never miss a tax deduction again.

Ready to get started? Download Portmoneo from the Apple App Store or Google Play Store, scan your first receipt, and watch as tax information gets extracted automatically. Your accountant will thank you—and so will your wallet.

Smart Receipt Scanning | Intelligent Analytics | Privacy