Aspect Query from Revenue

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Feria50

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Hi All

My dad operates as a small sole trader, when I say small I mean turnover of less than €25k p.a. He has an autoparts shop and would be pretty behind the times. The state pension keeps him ticking over and the shop keeps him out of the house.

He got notified this week of an Aspect Query from Revenue with three queries thereon.

Two are very simple and he will be able to lay his hands on the required documents, however for the 3rd he has been asked to produce invoices for purchases from one particular UK based wholesaler for the period 2009 - 2016.

He does hold onto invoices for a year or two (though I still wouldn't be certain that some dont end up in the bin) in order to complete his income tax return but beyond that his record keeping is dire.

He has contacted this supplier for copies but they have advised that they were taken over by another firm last year and may not have all records.

What is the best approach to take in such an instance with Revenue? In monetary terms I expect that any discrepancy as a result of missing invoices would be in the very low 100's, there are literally days where he takes in €50 or €60 in sales.

But as I alluded to, his record keeping system is rubbish and I would be worried what could happen next. He is very stressed since he received the letter

Edit: should have added that he stopped employing an accountant a number of years ago due to cost. Himself and mum put together a simple P&L/Balance Sheet each year on excel
 
Send Revenue a letter explaining all that.

They may well just leave it at that.

I would be surprised if the supplier does not have the invoices.

Does your father operate from a shop premises?

it might make more sense to get rid of the business.

Brendan
 
Thanks, we'll see how he gets on chasing up the invoices.

Yes he operates from a shop premises which he owns. I would much prefer if he just closed up, rented out the premises and left it at that.

He is in his mid 70's and while very active, he doesn't have hobbies as such so the shop is his only outlet in life.
 
absolutely nothing to worry about - revenue are probably the best government dept to deal with and they are quite human. If everything is as you say, the query will be closed off very quickly.
 
What is the statutory period that he has to hold onto the invoices for? I thought this was 6 years.
 
Well things have moved on since my last post and not for the best.

He complied with the original request but then received notice of a full audit for the year 2014.

The inspector came to his premises today and by all accounts was less than impressed with Dad's record keeping.

First off, the invoices they had sought for the UK based supplier (2009 - 2016) I mentioned above showed that he had not paid any vat. They advised that this would incur an automatic €4k penalty. I presume he will also have to pay the vat owed on top of this.

They took away the scant records he had for 2014 and said they would be in touch. I wasn't there with Dad so can only relay this information 3rd hand. He is in a bit of shock from the whole thing.

I dont know what will happen next, I expect he will have the wherewithal to pay the €4k but beyond that I am not sure where he stands financially.

We will wait for the inspectors next correspondence, is the time for seeking help from an accountant now passed? With a minimum €4k penalty looming, funds will be tight without an accountants fee on top.

As it stands he is threatening to close up shop and it taking all my willpower to stop him from throwing in the towel and burying his head in the sand.

Regarding the non payment of vat, it appears to relate to this one supplier only. Dad is effectively claiming ignorance and I tend to believe him although I appreciate its not a meaningful defence.

Is another penalty also likely for poor record keeping?
 
peemac said:
absolutely nothing to worry about - revenue are probably the best government dept to deal with and they are quite human. If everything is as you say, the query will be closed off very quickly.
Click to expand...
Not in my experience - inspectors often use the case to manufacture the highest penalty and interest.

In my view here Feria50 you need to get in contact with an accountant fairly quickly. The €4K penalty may be well be mitigated or rolled into a tax geared penalty. There are also time limits that the Revenue need to observe. Expert advice required quickly.
 
I would second the above advice that your Dad really should contact an accountant soon. He's already looking at a penalty of €4,000 and possibly more, so the fee for an accountant would not be huge in that context, especially if the accountant is able to negotiate the penalties down. In addition, I think your father would gain a lot personally from having someone with experience working on his side, if only to reduce his stress.
 
Not much good saying it now, but your dad shouldn't have consented to a Revenue visit unless he had prior professional representation available as unfortunately there is an element of inspector out there who let's say take a rather casual approach to the whole area of fair procedures and the like. Without such representation, he's likely to be further browbeaten before this is over.

It's now not so much a matter of whether or not he can afford an accountant to represent him, but more can he afford not having one.
 
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