roadrunner
Registered User
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Yes all avenues of advice are being utilised including our Auditors - no harm in getting the informed knowledge of AAM formulites either!With respect if you are running a business that is big enough to employ a Financial Controller, you should be getting your own professional advice on business issues such as this?
Is it not the other company's financial controller he is talking about?
Is it not the other company's financial controller he is talking about?
Yes good advice there from davecork - a lot more helpful than Howitzers smug cynical views.
However surely you have probably paid Revenue this amount in VAT already and as such you could then simply offset it against what you have already paid but didn't need to at the time?
Yes thats the redeeming part of the situation - we wern`t charged Vat on these invoices so we can recliam any that is now charged.NB - I am not an accountant or a Tax Lawyer
My opinion based on my experience is that you will be liabel to pay the VAT on any invoices where the VAT amount was 0.00 - VAT is a tax due to the Revenue and VAT registered businesses are merely the collectors of the VAT.
However, if you haven't offset the VAT charged to date then you should be able to offset it once charged.
The other element is - would it trigger a revenue audit to have one substantial vat reclaim amount like this?
Yes - speaking to the suppliers FC, the auditors were mentioned alright!Well if the first time the Revenue know anything about this issue is a claim for 100k refund then possibly!
I would assume that you should make contact with the revenue to explain the situation to make sure you comply correctly and that they are aware of why you are making abnormally large reclaims - and make sure you do so in writing!
As an aside - I would question why your auditors failed to notice this issue - surely this is one of the reasons for having auditors (I know I know I'm living in dreamland!)
Well if the first time the Revenue know anything about this issue is a claim for 100k refund then possibly!
I would assume that you should make contact with the revenue to explain the situation to make sure you comply correctly and that they are aware of why you are making abnormally large reclaims - and make sure you do so in writing!
As an aside - I would question why your auditors failed to notice this issue - surely this is one of the reasons for having auditors (I know I know I'm living in dreamland!)
I have heard it said that the selection process for Revenue Audits is automatic and that correspondence to explain particular trends etc is useless in averting an audit.
Most companies nowadays are audit-exempt.
Audits are in any event of limited use in detecting irregularities of this nature as they are predicated on reviewing sample data. As such having an audit done will increase the possibility of any such irregularities being found but it will not guarantee this.
Indeed they probably have - the opposite would not make sense.Yes I have heard something similar but I was under the impression that Revenue would still have some sort of "manual" audit trigger if somebody saw something that they thought was odd and couldn't see an explanation for it.
At the risk of being ludicrously pedantic, the audit exemption threshold was raised by the enactment of the 2006 Companies Act, not the Budget or Finance Act.Good point - particularly since they raised the exemption threshold in the previous budget
Indeed, but again you are back to the question of the effectiveness of audit sampling and testing. It is impossible to give a 100% guarantee that audit tests, even when properly performed, will reveal all oddities and irregularities.Again I agree but would an auditor be expected to check some key figures? ie sales, corporation tax, VAT
At the risk of being ludicrously pedantic, the audit exemption threshold was raised by the enactment of the 2006 Companies Act, not the Budget or Finance Act.
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