Maximum supplementary amount that can be paid for VAT

M

MidlandsBase

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I'm not sure if there is a specific amount that Revenue has but I am doing up my VAT3 for March - April and, for cashflow reasons, I want to hold back some Vat from this period and then pay it as a supplementary amount for the next vat3 return. I am aware of the danger of putting on hold payments which need to be made but just need to know if there is a maximum amount that can be held back and then added as a supplement subsequently.
 
Just be careful.

There is no maximum amount as you are not supposed to be doing this. If it is significant there could be interest and penalties on the underdeclared VAT.

I have come across a number of clients who have returned the VAT as Nil due to cash flow. They are all having revenue audits now! You would be better off filing it a bit late then filing it wrong as it is only March-April.

Alternatively if it is just a cashflow issue and all your vat returns are up to date then why not go on direct debit?

Hope this helps

DB
 
Hi Dbran,

Thanks for that. The amount owed would be 2900 but I was thinking of filing 1900 and 1000 the month after. How do you mean filing a bit late? Does that in itself not trigger an audit these days?
 
I'm sure Revenue would rather see the return filed on time and the liability correct. Put in a note to explain why the total amount is not being forwarded. (Revenue do not accept post dated cheques as far as I know.) You will pay interest on late payment, but will have the relief of knowing that everything is above board.

Revenue will not necessarily audit you for one late return, but it is one of the markers that might draw an audit down on you.
 
I file online with ROS so the ability to put in a note is not an option. What is to stop me filing 1900 for march -april and just putting the 1000 owed into the may - june period? Does it not balance itself out at the end of the year then when creating a vat rtd?
 
it does balance itself out but if you were to be audited they would see that and this could open a can of worms that they may want to look at previous years etc, you can file the return and not pay or make a payment without filing on ROS
 
I definitely do want to file and pay for march - april. I guess if I do opt to spread the payment over two periods I need to have alook back at my previous returns to make sure it is not something which stands out like a sore thumb. I know it's a slippery slope to start doing this and a risky one at that so I'll have a think about my options and see where I go from there.
 
Hi

Agree with all the above posts.

But as it all balances out in the end I still think you should consider going on direct debit scheme. You should go to the revenue web site and do a search for form "CG7" which is the direct debit mandate form for VAT and PAYE.

Work out your annual liability to VAT and divide it by 12. You then file a singe vat return at the end of the year and pay or refund the balance then. Reduces the possibility of revenue audit and helps your cashflow.

Regards

DB
 
DB,

Thanks for that. I think I will go down that route. It seems strange though that I can underpay (by inadvertently underestimating my monthly DD) my VAT3 until the year end but can't do it from one month to the next. I guess that's the advantage of the DD route.
 
Yes. But you need to make sure if there is an underpayment at the end of the year it is not more then 10% of the final liability.

DB
 
File the correct return and then just email them and say that you are having cash flow difficulties and will pay as soon as possible.

I did this in January with a liability of €4,600 and they were very reasonable. They emailed back to say they were putting a hold on the account for a few weeks and if I paid shortly there would be no penalties.

I paid within 2 weeks and they replied by email to say they had received the payment and all was in order.

Above all let them know the situation as this will remove any suspicion on their part.
 
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