Is our “VAT Compliance Inspection” valuable for you?

Our “VAT Compliance Inspection” will be valuable to you if…

  • …efficiency is important to you.

Robust VAT compliance processes implemented correctly will help avoid having to deal with costly VAT errors in the future, potentially covering a number of years and taking up your valuable time.

  • …your business is special or unusual. 

Is there anything special or unusual about your business model which deserves a closer look? Has the business changed recently, or are you planning significant changes? In short, is there anything we need to be aware of that may need to be considered when reviewing the business’s VAT compliance procedures?

  • …you want to avoid VAT losses, for example:
  1. In cases where VAT has incorrectly not been charged to customers, it is often difficult to make a retrospective charge to correct this, particularly if a number of years have passed, and it may damage your relationship with the customer. In addition, the contractual agreements may not allow you to retrospectively make an additional charge for VAT or the customer may be insolvent or no longer trading. In respect of a standard rated supply, if VAT cannot be charged to the customer the VAT is payable by the business out of the monies received and reduces the margin earned by 19/119 of the amount invoiced.
  2. VAT incorrectly charged on purchase invoices is not recoverable, eg the place of supply is not in Germany, the issuer is not the debtor of the VAT, the supply is VAT exempt or the recipient of the invoice is not the recipient of the supply. In such cases, should the tax authorities discover you have incorrectly recovered VAT, it will be repayable plus interest. Further, it does not automatically follow that you will obtain reimbursement from your supplier.
  • …you want to enjoy a good business relationship with your customers and suppliers.

Avoid difficult discussions with your business partners in connection with the VAT treatment of transactions, some of which may have occurred many years ago, which might strain the business relationship.

  • …you want VAT audits to be a formality and not lead to additional VAT liabilities.

Not having robust VAT compliance procedures in place is more likely to result in errors being made. This often results in unfavourable outcomes to VAT audits, with the associated additional VAT liabilities, penalties and interest, and the unwelcome investment in time dealing with the issues raised. This could put the business under financial pressure.

If your business has a “VAT Compliance Inspection”, the risk of conflicts with the auditor and the need for retrospective corrections is minimised. In addition, the audit is simplified and accelerated significantly.

  • …you want to avoid criminal proceedings.

We have noticed that for many years the tendency has been for the tax authorities to commence criminal proceedings following a suspicion of negligence or premeditated tax evasion, in cases where mistakes are identified.

This is a substantial personal risk for the managing directors and other staff responsible for VAT in your business. In addition, considerable fines may be imposed on the business, besides additional VAT payments and interest. By having a VAT compliance review these risks and potential costs can be minimised from the outset.

Do you have questions or want to know more?

Contact us