The Vat Practice, Cork. Ireland

The “Aspect” Review, Revenue signals a new approach to audits

Nick Ryan — Tue, 25 May 2010 10:25:25 +0000

News on the grapevine is that Revenue have adopted a new approach in undertaking VAT and Customs audits. The Revenue audit as we know may well have changed forever leading greater emphasis on businesses to control their compliance obligations and providing for that greater threat of higher penalties where errors are identified.
We understand that Revenue teams have been established with a mix of both VAT and Customs experienced officers. Revenue are researching industry types in order to identify “aspects” in that industry which might result in compliance weaknesses in VAT and Customs. These findings are then passed to the Aspect Review teams to be applied to individual businesses to determine if there are any signs of these aspects within that business. For instance, for wholesalers, VIES and Intrastat reporting can evidence imports of goods which have not been declared by the business and could equate to underdeclarations of sales. Where an aspect is identified within a business then an audit is triggered.
A key issue that has resulted from this is that Revenue’s diligence in reviewing repayment returns prior to approval of the repayment has diminished. By lessening these reviews there is a greter risk for businesses, especially start ups, sole traders and partenrships, where management demands of all functions is high, to duplicate simple errors from the first VAT return in further VAT returns which, if not identifed from a repayment review, may result in a significant VAT cost to the business in the long term.
The Aspect review places further impetus of the management and control of the taxes with the business and, in these times where cost control is key and where controls can often slip as a result of this and other cost control measures then there is a stronger likelihood that errors may occur. With the lessening of control by Revenue then where errors are found, the potential for higher penalties will be more evident.
If you have experienced an Aspect review or have just been notified of a Revenue Audt we would be interested to know in order to monitor the situation and gain more insight into Revenue’s approach. Please provide your comments below.

Revenue begins to flex its muscles

Nick Ryan — Tue, 09 Mar 2010 15:01:13 +0000

With the tax take continuing to plummet it is no surprise to hear that the Revenue have begun to flex their muscles in seeking additional tax revenues. A speaker at a recent seminar in Cork suggested it would be likely, following the 2009 tax deficit, that Revenue audits will be on the increase in 2010. I, for one, am surprised at the lack of activity from Revenue in policing the taxes as, from experience in the UK, in times of economic slump UK Revenue were quick to sound the rallying call to arms for Revenue officers to seek out and find additional tax revenue through audit and investigation. Here in Ireland the opposite appears to have occurred with Revenue becoming a sleeping giant, doors locked, telephones switched to voice mail and a paucity of response to general queries. Perhaps, as some suspected, the government put pressure to bear on Revenue not to chase struggling businesses in these difficult times though with the government feel good messages that Ireland is moving out of recession then perhaps the restraining orders have been rescinded.
I have heard from a number of businesses in West Cork of notable sightings of Revenue officers walking the high streets of Bandon, Skibbereen and Clonakilty focusing on cash traders and service providers taking a particular interest in till receipts and associated records, employment records and details of service providers, even from shop window and notice board adverts!. From this I can only surmise that it is the easy to get low hanging fruit that is Revenues first choice target. Although this is the easy option I would think that the potential tax revenues to be gained from targeting this area would reap a limited and insignificant reward in comparison to the plummeting tax take we read about in the press.
From a VAT perspective, VAT is a tax that can for the Revenue generate “quick wins” in revenue as it is a tax that can bring with it both complexities on its application and difficulties in accounting, especially for the smaller business where the proprietor might be required to wear many hats of salesman, marketer, book-keeper, and administrator.
Therefore we should heed the warning signs and prepare for an audit by assessing your business for risk in all tax heads. When you have an opportunity, a moment for self reflection on how you manage your tax accounting and compliance obligations should be considered. Any doubts or concerns should be investigated and where these doubts are shown to exist then seek counsel. Also, where business can be quiet then now is the opportunity to consider what procedures can be put in place to strengthen and improve your tax reporting obligations and provide for greater confidence in dealing with the Revenue audit. From experience those businesses that have taken the time to improve their management of the tax reporting functions have reaped the benefit of this in the future by reduced costs in dealing with a Revenue audit.
In these times I doubt Revenue will consider ignoring the minor errors.
If you are concerned over your businesses readiness to manage a Revenue audit, have concerns over your VAT reporting and accounting systems or have news on Revenue activity then please submit your comments below or contact us by email or telephone to discuss.

The VAT Package – It’s on its way!

Nick Ryan — Tue, 24 Nov 2009 16:42:46 +0000

With effect from 1 January 2010, the majority of measures adopted by the ECOFIN Council in respect of the place of supply rules for services encompassing the additional compliance and reporting obligations to be applied by their introduction and the new procedures to be implemented for the making of 8th Directive refund claims will be effective. These changes have been collectively referred to as the “VAT Package”.

With only just over a month to go, time is running out in ensuring your businesses’ VAT accounting and reporting systems can manage these changes correctly.

There is too much information to cover in this blog post and we can send you a detailed information note if required (please contact us by email for this) but the key issues to note are:

For B2B services, under the VAT Package, the general rule will switch from the place where the supplier is established to the place where the recipient is established. There are a number of exceptions to the rule including services made in connection with immovable property, passenger transport and cultural, artisitic, scientific, sporting and entertainment services.

For B2C services, the general rule will continue to apply i.e. the place of supply of services is the place where the supplier is established (though the current exceptions provided to this rule will continue to apply).

There will be an option for Member States to introduce “use and enjoyment” rules for supplies of services where the place of supply is outside the EU but the use and enjoyment is in the EU or, where the supply is within the EU but used and enjoyed outside of the EU.

The VAT Package will replace the existing refund machanism through the 8th Directive and introduces a number of key changes including, a detailed timetable for processing claims, a simplified, electronic procedure, an extension to the current deadline for submission that provides businesses with more time to prepare and submit refund claims and, where Revenue delay in processing claims, the potential for businesses’ to seek entitlement to interest in lieu of the delay experienced.

The new rules result in a need to extend the reporting requirements for VIES and Intrastat by businesses to encompass supplies of services. This can result for some businesses in additional VAT reporting and accounting requirements in order to meet its complinace obligations. Therefore businesses need to assess their current VAT accounting and reporting sytems to assess what changes etc. they need to implement by 1 January 2010.

Should you require any assistance in cosnsidering how these changes impact on your business, what steps you need to take, would like to share your experiences or have any questions then please either make a comment to this blog or contact us.

Nick Ryan’s Profile

Nick Ryan — Tue, 24 Nov 2009 10:32:45 +0000

Nicholas Ryan the principal of The VAT Practice has over 20 years experience as a VAT specialist building up an extensive knowledge and understanding of Irish, UK and international VAT.

Nick started his career with HM Revenue & Customs as a VAT control officer, it was his interest in how businesses manage their operations and his desire to work more closely with businesses in managing their VAT affairs that lead him to move into the private sector.

Nick has worked for a number of the Big 4 practices both in Ireland and the UK. Since his move to Ireland in 2002 Nick was Director of VAT for PricewaterhouseCoopers in their Cork office and, prior to this, head of VAT services for the Munster Region for Ernst & Young. During his career in the UK Nick also worked for PricewaterhouseCoopers and was a part of the VAT leasing team at KPMG.

During his career he has worked with a wide range of clients including Plc’s, owner managed businesses, sme’s and not for profit organizations. He has advised these clients on a broad spectrum of VAT issues from multi territory transactions, cross border and domestic issues, managing Revenue audits, compliance and risk management issues and the application of VAT to specific transactions or industry sectors.

Privacy Policy & Disclaimer

Nick Ryan — Wed, 11 Nov 2009 14:15:56 +0000

Privacy Policy

The publishing firm values the privacy of its clients and Web/blog site viewers. Any of the following personal information that may be made available to the firm when browsing or navigating the site shall be kept confidential:

First and last name

Company, home, postal or other physical address

Other contact information, for example, telephone number, fax number, email address, and other similar information

Title or position in a company or an organization

Occupation

Industry

Personal interests

Any other information needed to provide a service you requested

Examples of scenarios where our visitors provide their personal information include, but may not be limited, to:

Emailing, calling or communicating with the accountant or accountancy firm.

Posting a question or comment through the site.

Requesting literature.

Registering to attend a seminar or any event.

Participating in an online survey.

Requesting inclusion in an email or other mailing list.

Submitting an entry for a contest or other promotions.

Logging in to the site, thus requiring a user name and/or a password.

Any other business-related reason.

The firm provides you the opportunity to agree or decline to give your personal information via the Internet. The firm will inform you of the purpose for the collection and does not intend to transfer your personal information to third parties without your consent, except under the limited conditions described under the discussion entitled “Information Sharing and Disclosure” below. If you choose to provide us with your personal information, we may transfer that information, within the firm or to a third party service provider as necessary.

Domain Information Collection

The firm may collect domain information to enable us to analyze how our visitors use this site. This data enables us to become more familiar with which people visit our site, how often they visit, and what parts of the site they visit most often. The firm uses this information to improve its Web-based offerings. This information is collected automatically and requires no action on your part.

Use of Cookies and Tracking User Traffic

Some pages on this site may use “cookies”—small files that the site places on your hard drive for identification purposes. A cookie file can contain information such as a user ID to track the pages visited, but the only personal information a cookie can contain is information you supply yourself. These files are used for site registration and customization the next time you visit us.

Some parts of the site may also use cookies to track user traffic patterns. The firm does this in order to determine the usefulness of our Web site information to our users and to see how effective our navigational structure is in helping users reach that information. Please note that cookies cannot read data off of your hard drive. Your Web browser may allow you to be notified when you are receiving a cookie, giving you the choice to accept it or not. If you prefer not to receive cookies while browsing our Web site, you can set your browser to warn you before accepting cookies and refuse the cookie when your browser alerts you to its presence. You can also refuse all cookies by turning them off in your browser, By not accepting cookies, some pages may not fully function and you may not be able to access certain information on this site.

Information Sharing and Disclosure

Your personal information is never shared outside the firm without your permission, except under conditions listed below:

Consenting to share your information to a third party service provider working on our behalf to serve you.

Requiring us to provide you with a product or service.

The firm will also disclose your personal information, if required to do so by law, or in urgent circumstances, to protect personal safety, the public or our sites.

Internet Security

The firm strives to protect your personal information; however, we urge you to take every precaution to protect your personal data when you are on the Internet. Change your passwords often, use a combination of letters

Protecting the Privacy of Children

Children under 13 years old are not the target audience for our Web site. To protect their privacy, the firm prohibits the solicitation of personal information from these children.

Links to Third Party Sites

This site may contain links to other sites. The firm does not share your personal information with those Web sites and is not responsible for their privacy practices. We encourage you to learn about the privacy policies of those companies.

Changes to this Privacy Policy

The firm reserves the right to change, modify or update this policy at any time without notice. Any substantial changes in the way we use your personal information will be posted on this site.

If you have questions or concerns about our Privacy Policy, please email us at the contact information on the site

Disclaimer

Our Blogs are a brief note of salient points extracted from complex legislation. The information therein is for general guidance only and is without responsibility for loss occasioned to any person acting or refraining from acting as a result of the information given. More detailed information and advice can be provided following consultation with one of our partners

Welcome

Nick Ryan — Wed, 14 Oct 2009 14:37:37 +0000

Welcome to the VAT Practice blog.
Our aim is for our blog to provide you with access to:

Hot topics – which features regularly updated information, ideas and comment from The VAT Practice on Irish and international VAT issues.

Talk to us – businesses can provide comment on our articles in Hot Topics and enter into discussion on other businesses entries in order to share experiences.

Blogs have been found to be a useful way for people to showcase their own opinions and experiences, gather feedback and opinion from other and create a living network of like minded people interested in the issues and ideas raised. We at the VAT Practice would welcome all businesses to use the blog as a VAT Forum, an area where businesses can discuss VAT issues and concerns prevalent to their business highlighting VAT queries, dealings with Revenue, Revenue rulings and decisions and, god news/success stories.

The VAT Practice’s aim is to provide a free thinking VAT forum and news site for Irish businesses with Ireland’s first blob devoted to VAT, a tax that provides for many complexities, nuances and frustration. We are aware that businesses can often be frustrated n their endeavours in managing their VAT affairs and that there is no forum available for businesses to discuss and share views on VAT.

We at the VAT Practice hope you find our Hot Topic postings useful and interesting and invite you to comment on these and share your experiences in our Forum. Therefore feel free to use our blog by clicking on the comment button at the end of each Hot Topic entry.

If you would like to know when a new Hot Topic has been posted then please complete the Hot Topic subscription link and The VAT Practice will send you an email alert.

Revenue audits, better to be prepared

Nick Ryan — Sun, 11 Oct 2009 13:02:21 +0000

Without reminding you of the current difficult times all businesses are now experiencing, Revenue audits can still provide for a stressful and traumatic experience if not managed with the due care and attention required.

With the tax yields falling there is greater pressure on Revenue to collect, collect, collect. Associated with this. cost containment, and preferable reduction, is a key element of any businesses’ strategy for survival. With cost containment/reduction there is the potential to shortcut on obligations in the management of a businesses’ tax burden which can result in a business either paying too much or in failing to be fully compliant. Failure to comply in meeting your tax obligations can result in a heavy price both in underpaid taxes, and the associated penalties and interest, the increase in business costs in both dealing with the error(s) and, in rectifying matters.

Control on both sides of the fence is becoming a mantra, how much focus to attention is applied to this by a business will determine how smoothly and efficiently they deal with a Revenue audit.

The key factor in managing a Revenue audit is being prepared whether a business has been selected or not. If the management of a businesses’ VAT, and other tax, accounting and reporting obligations are correctly maintained and abreast of any changes in legislation then it is less likely that a Revenue audit will identify errors which could result in a negative cost to the business. Where these control and management functions have been neglected then the repercussions could be fatal to a business in these times where cash flow can be so precarious.

The VAT Practice is aware that businesses can not open the door for full on reviews and health checks “just to see” if there is a problem but through risk analysis and open discussions with a business we can assist a business in identifying where potential weaknesses may lie and what, if any, the associated potential cost may be if that weakness exists. Like in other walks in life, is there little venture in trying to remedy the past when greater reward can be achieved by taking measures that impact on how we manage now and for the future. To focus on the now can lead to a better future.

If you have concerns on your businesses’ VAT accounting and reporting systems, have been identified by Revenue for an audit or are currently undergoing a Revenue audit then please contact the VAT Practice for a no obligation discussion.

Any comments you have about your experiences with dealing with Revenue audits, management of your VAT reporting obligations and on this entry are appreciated and welcomed. Please submit these in the add a comment link below or, alternatively please contact us.

Welcome

Nick Ryan — Sat, 10 Oct 2009 12:08:04 +0000

The VAT Practice, established in 2009 by its Principal, Nicholas Ryan, offers a complete range of services on VAT issues dealing with the complexities of Irish, UK and international VAT and indirect tax issues focusing on delivering a specialist service tailored to meet its client’s needs.
Our key philosophy is to deliver quality specialist VAT services that provides value to your business at a cost that is not prohibitive. The advice we provide is both confidential and impartial.

If you are Restructuring your business then it is essential you seek specialist VAT advice to ensure both the correct VAT treatment is appplied to the transfer or disposal of assets, specifically property. Bear in mind the new rules covering property transaction that were introduced in July 2008!

Risk management is a key driver for businesses today, see the article in the April edition of Owner Manager for more on this. With the introduction of Revenue’s new “Aspect review” audits, see our blog for more information, businesses need to focus more on their compliance in order to ensure simple errors do not result in additional costs and associated penalties. Remember it is often the simple error, when left unattended, that can lead to a significant cost in both tax and penalities, more than ever with the imposition of the changes to the penalty regime. Try our no obligation Free Risk Assessment Service to assess your businesses’ position.

For more information about our services please access the drop down menus.

The VAT Practice is pleased to be associated with Bizstartup.ie a valued supporter of new businesses, entrepreneurs alike.
We also pleased to be linked with the SFA and IT@Cork.

Ask a question for free and see what we can deliver! Alternatively visit our Blog and enter the discussion.

Contact Details

Nick Ryan — Fri, 09 Oct 2009 11:51:14 +0000

The VAT Practice,
The White House, Cloncorban, Rossmore, Clonakilty,
Co. Cork

Principal: Nicholas Ryan

Tel: +353 (0)23 8838181
Mob: +353 (0)83 3340324
Fax: +353 (0)23 8838181

Email : info@thevatpractice.ie

Nick Ryan’s Profile

External Links

Nick Ryan — Fri, 09 Oct 2009 11:43:48 +0000