100K Back Vat due - help!

R

Recam

Guest
It`s meant to help you - to see the light. I came on here looking for advice not a sermon on the merits of Revenue audits.
Hey! cool the jets, I'm not here to give sermons, mine was a point of view, which I'm entitled to defend. It's intended as advise to those interested in listening, processing and acting on if they think worth while or dump if they don't.
You make it sound like I'm Ireland's biggest Revenue Audit fan. Let me tell you I dreaded more that I've looked forward to & I've been involved in quiet a few.
 

simplyjoe

Frequent Poster
Messages
535
You ignored my earlier request for you to clarify whether or not you are an accountant yourself. Perhaps you might please now do so?[/quote]

Sorry I posted to help the OP only. This information is not relevant to him.

What is relevant is that some accountants seem to think that missing massive errors in a client's books is totally not his fault. He is obliged by common law to give due care and attention. In this case his accountant has a case to answer. Maybe he was at fault - maybe not. Either way he needs to challenged. Please stick to the OPs request. Dont dis my opinion. I have as a customer probably more right to question an accountant's role than an other accountant protecting his colleagues. How do you know that the accountant was not at fault? Discussion finished - being developed into a sideline show. There are too many of these on these boards.
 

ubiquitous

Frequent Poster
Messages
3,782
You ignored my earlier request for you to clarify whether or not you are an accountant yourself. Perhaps you might please now do so?[/quote ]

Sorry I posted to help the OP only. This information is not relevant to him.

What is relevant is that some accountants seem to think that missing massive errors in a client's books is totally not his fault. He is obliged by common law to give due care and attention. In this case his accountant has a case to answer. Maybe he was at fault - maybe not. Either way he needs to challenged. Please stick to the OPs request. Dont dis my opinion. I have as a customer probably more right to question an accountant's role than an other accountant protecting his colleagues. How do you know that the accountant was not at fault. Discussion finished - being developed into a sideline show. There are too many of these on these boards.
Hang on a second. It was ssap16 http://www.askaboutmoney.com/member.php?u=19925, not simplyjoe http://www.askaboutmoney.com/member.php?u=18389 who posted the previous comments I queried. The mind boggles...
 

capall

Frequent Poster
Messages
339
One of our suppliers rang us this morning saying that they discovered that they had not been charging Vat on their Invoices and that now they have to issue us with an amount of €100K vat due going back on Invoices to 2004. Our cashflow at the best of times is severely restricted - this would casue major problems. Their FC said the might be able to spread amount over a few months & we could claim back on our Vat return.
What is our postion here - do we have to pay this Vat?
They cannot retrospectively collect the vat like this
It is their problem not yours
 

Crugers

Frequent Poster
Messages
436
It is their problem not yours
From the Revenue Leaflets & Guides Chapter 9 Invoices, credit notes etc.
"Traders who issue invoices and credit notes, and persons to whom these documents are issued, should ensure that the documents accurately represent the transactions to which they refer. Failure to do so may have serious consequences for all parties concerned. If, for example, a wholesaler issues an invoice describing as zero rated, goods which are in reality taxable at the standard rate of 21%, the wholesaler is nonetheless liable for VAT at the 21% rate and also by his or her action is open to prosecution."
It is the duty of the seller to collect VAT on behalf of the state. If it wasn't charged and the customer doesn't opt pay up then the seller would still be liable.
Of course that is the 'worst case scenario' for the seller.
In reality and from what has been posted here the customer seems somewhat willing to pay but with certain conditions.
It shouldn't 'cost' the customer.

So the original question was
What is our postion here - do we have to pay this Vat?
Well, in the end, NO! because if you pay the VAT invoice you can reclaim the VAT paid. Technically no cost to you.
Will it cost you? Well if you pay the invoice immediately and wait for the reclaim then yes!

The VAT should be invoiced by the seller. The customer should reclaim. The seller should wait until the reclaim is paid before looking for payment. If that sparks an audit for the customer the seller should foot the bill(s).

The seller is on very thin ice.


The Revenue guide continues: "The retailer is likewise liable at the 21% rate of VAT on the subsequent supply..."

QUESTION TO OP: Did you charge VAT on the goods when reselling? If not you could be up the creek and relying on your customers to cough up your VAT liability...
 

roadrunner

Frequent Poster
Messages
265
From the Revenue Leaflets & Guides Chapter 9 Invoices, credit notes etc.
"Traders who issue invoices and credit notes, and persons to whom these documents are issued, should ensure that the documents accurately represent the transactions to which they refer. Failure to do so may have serious consequences for all parties concerned. If, for example, a wholesaler issues an invoice describing as zero rated, goods which are in reality taxable at the standard rate of 21%, the wholesaler is nonetheless liable for VAT at the 21% rate and also by his or her action is open to prosecution."
It is the duty of the seller to collect VAT on behalf of the state. If it wasn't charged and the customer doesn't opt pay up then the seller would still be liable.
Of course that is the 'worst case scenario' for the seller.
In reality and from what has been posted here the customer seems somewhat willing to pay but with certain conditions.
It shouldn't 'cost' the customer.

So the original question was


Well, in the end, NO! because if you pay the VAT invoice you can reclaim the VAT paid. Technically no cost to you.
Will it cost you? Well if you pay the invoice immediately and wait for the reclaim then yes!

The VAT should be invoiced by the seller. The customer should reclaim. The seller should wait until the reclaim is paid before looking for payment. If that sparks an audit for the customer the seller should foot the bill(s).

The seller is on very thin ice.


The Revenue guide continues: "The retailer is likewise liable at the 21% rate of VAT on the subsequent supply..."

QUESTION TO OP: Did you charge VAT on the goods when reselling? If not you could be up the creek and relying on your customers to cough up your VAT liability...
Yes Vat has been harged on goods resold.
This instance seems to be the only mishandling, albeit a substantial one, of Vat procedures.
It seems the best route is apply for the rebate & make supplier wait until rebate is received.
We have received a letter of apology from the supplier saying it was a system error that was unfortunately never spotted until we recently queried their invoicing.
They state they are willing to help in any way to remedy the situation.
From our point of view it had been incorrectly assumed by persons dealing with the invoicing that this company was Vat exempt.
At this stage would a letter to the revenue help or is a Revenue audit inevitable.
(just for those who have posted before on benefits of R.As - our affairs are in order, had R.A 4 years ago, no problems & have an updated Tax clearance certificate)
 
R

Recam

Guest
At this stage would a letter to the revenue help or is a Revenue audit inevitable.
(just for those who have posted before on benefits of R.As - our affairs are in order, had R.A 4 years ago, no problems & have an updated Tax clearance certificate)

Letter to Revenue would most definately be helpful, Audit is not inevitable (more likely your supplier would receive one than you)
My references to the benefits of R.A. was somewhat off topic but I thought worth mentioning, I can see from the reaction that the purpose of R.A. is completely misunderstood.
Up to date tax clearance is not evidence that your affairs are in order, it's based on returns made on time and no amounts (declared by you) being outstanding. You could still get a tax clearance cert and be cooking the books at the same time.
Best of luck with what every course of action you take.
 

Nige

Frequent Poster
Messages
1,032
Send in a letter to the Revenue explaining the situation and include a copy of the VAT invoice.
 

roadrunner

Frequent Poster
Messages
265
Letter to Revenue would most definately be helpful, Audit is not inevitable (more likely your supplier would receive one than you)
My references to the benefits of R.A. was somewhat off topic but I thought worth mentioning, I can see from the reaction that the purpose of R.A. is completely misunderstood.
Up to date tax clearance is not evidence that your affairs are in order, it's based on returns made on time and no amounts (declared by you) being outstanding. You could still get a tax clearance cert and be cooking the books at the same time.
Best of luck with what every course of action you take.
O.K Recam thanks - peace has broken out!
 
Top