# 100K Back Vat  due - help!



## roadrunner (20 Sep 2007)

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?


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## ubiquitous (20 Sep 2007)

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?


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## paddi22 (20 Sep 2007)

Is it not the other company's financial controller he is talking about?


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## roadrunner (20 Sep 2007)

ubiquitous said:


> 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?


Yes all avenues of advice are being utilised including our Auditors - no harm in getting the informed knowledge of AAM formulites either!


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## efm (20 Sep 2007)

paddi22 said:


> Is it not the other company's financial controller he is talking about?


 
Yes - I think it was.

Roadrunner - how were the invoices from the supplier presented originally? Did they include a VAT figure? If they did did you offset any of this against any VAT due from your customers when returning to the Revenue? Is the supplier an Irish company charging Irish Vat?

If the original invoices didn't include a VAT figure then maybe you should have queried it?


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## roadrunner (20 Sep 2007)

The original Invoices were on a proforma basis & charged Vat - afterwards they stopped charging Vat so it went unnoticed both by our auditors & theirs. Aside from rights & wrongs what can be done now - do we have to accept vat charges going back so long?


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## Howitzer (20 Sep 2007)

I find it hard to believe that neither you or your accountant didn't note the lack VAT on their bills. Either you were complicit in tax evasion or your supplier is trying to pull a fast one, having given you a proper invoice but then not passing on any VAT to the Revenue.

Did you receive proper invoices quoting VAT number? Did you charge VAT to your customers and offset the VAT paid to your supplier against this?

(Post crossed)
My understanding is that you have a VAT liability and are obliged to pay it. I'm sure you could bring your supplier to the courts for any further expenses caused by this but I'm sure that would be small beer compared to the VAT liability.

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?


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## daveccork (20 Sep 2007)

claim vat back at earliest possible time and leave the supplier wait a bit. Surely they do not expect immediate payment...... at least use 30/45/60 days. or pay some now and when you get your refund pay the balance.

it is only a timing issue isn't it? if so minimise the time between payment to supplier and receipt from Revenue.


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## ubiquitous (20 Sep 2007)

paddi22 said:


> Is it not the other company's financial controller he is talking about?



Indeed. Apologies.

Best bet is to follow daveccork's advice.


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## roadrunner (20 Sep 2007)

Yes good advice there from davecork - a lot more helpful than Howitzers smug cynical views.


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## efm (20 Sep 2007)

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.

Post crossed - I agree davecork's approach seems the most sensible


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## Howitzer (20 Sep 2007)

roadrunner said:


> Yes good advice there from davecork - a lot more helpful than Howitzers smug cynical views.





Howitzer said:


> 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?


 
Seems very similar to davecorks advice. 

The fact that your bills were proforma and the subsequent omission of VAT in future bills was not outlined in your original post. You can only comment on the information posted.

Cynicism on tax related threads is usually well justified, I'm still sure clear how your accountant missed the subsequent lack of VAT charges.


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## roadrunner (20 Sep 2007)

efm said:


> 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.


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. 
The problem is timing of repayment of vat;as I`ve said we struggle quite a bit with our cashflow. The other element is - would it trigger a revenue audit to have one substantial vat reclaim amount like this?


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## efm (20 Sep 2007)

roadrunner said:


> The other element is - would it trigger a revenue audit to have one substantial vat reclaim amount like this?


 
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!)


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## roadrunner (20 Sep 2007)

efm said:


> 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!)


Yes - speaking to the suppliers FC, the auditors were mentioned alright!
Suppliers F.C have contacted revenue & likewise we will be contacting them as well, verbally & in writing.


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## ubiquitous (20 Sep 2007)

efm said:


> 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!



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.


efm said:


> 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!)



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.


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## efm (20 Sep 2007)

ubiquitous said:


> 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.


 
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.



ubiquitous said:


> Most companies nowadays are audit-exempt.


 
Good point - particularly since they raised the exemption threshold in the previous budget



ubiquitous said:


> 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.


 
Again I agree but would an auditor be expected to check some key figures? ie sales, corporation tax, VAT


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## ubiquitous (20 Sep 2007)

efm said:


> 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.


Indeed they probably have - the opposite would not make sense.



efm said:


> Good point - particularly since they raised the exemption threshold in the previous budget


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.



efm said:


> Again I agree but would an auditor be expected to check some key figures? ie sales, corporation tax, VAT


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.


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## ssap16 (20 Sep 2007)

Soft advice being given here. In all probability you will have to pay the VAT. However there is no way you should pay any of it until you get your refund from the revenue. This could take a long time as you will, dependant upon your turnover and past history, almost certainly be audited. This will entail extra costs in small additional revenue audit take and professional advice and staff costs to deal with the audit - who pays for this. I would be approaching my supplier questioning them if you should deal with them again and I would look for every discount going for the inconvenience that they are causing you.  As regards your own bookkeeper, accountant and auditor I woudl be asking them what are they at? You are paying them to handle these matters and large errors like this should have been spotted. Again especially with your accountant/auditor I would be looking for some compensation. At the very least no increases for a few years!!


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## efm (20 Sep 2007)

ubiquitous said:


> 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.


 
Really? I thought it was through an ammendment to the [broken link removed]

Ha! - Pedantic right back atcha!


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## ubiquitous (20 Sep 2007)

ssap16 said:


> Again especially with your accountant/auditor I would be looking for some compensation. At the very least no increases for a few years!!



Why, exactly? 

Unless you have at least some detailed knowledge of the terms under which accountants and auditors are engaged by clients, and the procedures they follow in adhering to these terms, then you are hardly in a position to make such a sweeping assertion.


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## hhhhhhhhhh (20 Sep 2007)

ubiquitous said:


> 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.
> 
> 
> efm said:
> ...



The revenue are actually decent people.
If there is something out of sorts with your VAT returns they will ring you for an explaination and its no problem.

The problem you have is that your explaination is so unbelieveable, that you will most like get an audit.


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## roadrunner (20 Sep 2007)

If the amount was reclaimed over an extended period - e.g supplier Invoice Vat at 10K a month or is the best policy just remedy situation post haste. Think supplier has taken legal advice not revenue advice as yet.


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## Recam (20 Sep 2007)

Why should you worry about the VAT reclaim leading to a Revenue Audit? If you are tax compliant then you have nothing to worry about.
In fact unless I was trying to deceive Revenue, I would actually welcome a Revenue Audit, in a way it would act as a free consultation.
If you are covering something then you deserve to be caught - thats the system !


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## efm (20 Sep 2007)

Recam said:


> Why should you worry about the VAT reclaim leading to a Revenue Audit? If you are tax compliant then you have nothing to worry about.
> In fact unless I was trying to deceive Revenue, I would actually welcome a Revenue Audit, in a way it would act as a free consultation.
> If you are covering something then you deserve to be caught - thats the system !


 
What??

Besides the time away from the day to day operations of the business that preparing for, and under-going, a Revenue Audit takes, and the additional costs your accountant / auditors will charge for helping you with the audit, you also run the risk of the Revenue making a mistake, or having an incorrect opinion, and then you having to go through the trouble of convincing them that they are wrong (which can be troublesome sometimes). I don't think anyone actually welcomes a Revenue audit!


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## roadrunner (20 Sep 2007)

Recam said:


> Why should you worry about the VAT reclaim leading to a Revenue Audit? If you are tax compliant then you have nothing to worry about.
> In fact unless I was trying to deceive Revenue, I would actually welcome a Revenue Audit, in a way it would act as a free consultation.
> If you are covering something then you deserve to be caught - thats the system !


Yep great free consultation alright - along with the time, stress & inconvenience of it all. I suppose you apply for one every year to avail of this consultation.


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## ssap16 (20 Sep 2007)

ubiquitous said:


> Why, exactly?
> 
> Unless you have at least some detailed knowledge of the terms under which accountants and auditors are engaged by clients, and the procedures they follow in adhering to these terms, then you are hardly in a position to make such a sweeping assertion.


 
At the very least your accountant would be expected to look over your records and have some cursory check of the records. A supplier supplying goods/services that gives rise to a €100,000 charge not being registered for VAT is, dependant upon the overall turnover, something I would expect either my bookkeeper or accountant to spot. As regards my knowledge of what they should or should not do: it seems you are saying that I have no right to comment on this because I don't have the necessary information to make a decision. I am sure, given your occupation, that you issue your clients with a letter of engagement which sets out your responsibilities and your client's responsibilities. Mine does. The contents of that letter and pure commonsense would dictate that at the very least one or both of the people looking after your books are responsible, if in a minor way, for not spotting the error. What else do they do if they dont ensure your records are well organised and in a broad term - 'correct'.


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## ssap16 (20 Sep 2007)

The OP should be really, really careful dealing with this supplier. If they have not charged you this vat means one of two things: 1) Their accounts system is poor and therefore all their bills need to be checked, their liquidity needs to be questioned and the quality of their work or goods also need to be questioned. 2) they have not declared their income for VAT and are hugely indebted to the Revenue. What other liabilities have they? Are they solvent? Desperate people do desperate thinks. Thread carefully.


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## ubiquitous (20 Sep 2007)

ssap16 said:


> As regards my knowledge of what they should or should not do: it seems you are saying that I have no right to comment on this because I don't have the necessary information to make a decision.


Not quite, but I would question the wisdom of your advice for the OP to seek compensation from their accountant/auditor even though you have absolutely no way of knowing whether they are at fault. 



ssap16 said:


> I am sure, given your occupation, that you issue your clients with a letter of engagement which sets out your responsibilities and your client's responsibilities. Mine does. The contents of that letter and pure commonsense would dictate that at the very least one or both of the people looking after your books are responsible, if in a minor way, for not spotting the error. What else do they do if they dont ensure your records are well organised and in a broad term - 'correct'.



No engagement letter in the world makes an accountant responsible for errors in the books, records or procedures of a non-client. (in this case, the OP's supplier)

ps Are you sure you're not an accountant yourself?


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## Recam (20 Sep 2007)

efm said:


> What??
> 
> Besides the time away from the day to day operations of the business that preparing for, and under-going, a Revenue Audit takes, and the additional costs your accountant / auditors will charge for helping you with the audit, you also run the risk of the Revenue making a mistake, or having an incorrect opinion, and then you having to go through the trouble of convincing them that they are wrong (which can be troublesome sometimes). I don't think anyone actually welcomes a Revenue audit!


 
I note from a previous mail that you are not an Accountant, so I assume (rightly or wrongly) your experience of Revenue Audits is limited.

I stand over my opinion that a Revenue Audit acts as a good check that you are doing everything correctly.
If you are compliant, there is no need to engage your accountant or auditors to help with the audit. Many Revenue audits are called "desk audits" and don't even involve a visit to the business premises & therefore should not involve a great deal of lost time in terms of day to day operations. They are particularly useful in new companies, where the owners would welcome guidence that their procedures are correct.
If you need evidence of this, look to the OP supplier, if they had a Revenue Audit, their mistake of not charging VAT would have been discovered and the OP would not be facing a problem now. 

Of course this is my opinion.


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## Recam (20 Sep 2007)

roadrunner said:


> Yep great free consultation alright - along with the time, stress & inconvenience of it all. I suppose you apply for one every year to avail of this consultation.


 
I don't understand your tone here, but I take from it that you don't agree with my opinion or otherwise don't understand the point I am trying to make. Read my other post it might explain.
If compliant there should be no time lost or stress caused. The inconvenience caused should be outweighed by the benefits gained.
Simple example, if you run a company and unknown to yourself you were applying the incorrect VAT rate, wouldn't you welcome an early intervention from Revenue to give you the chance to correct the mistake or would you prefer for it to go on for years and when Revenue eventually come knocking they discover a massive mistake which costs you the earth ?


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## roadrunner (20 Sep 2007)

Recam said:


> I note from a previous mail that you are not an Accountant, so I assume (rightly or wrongly) your experience of Revenue Audits is limited.
> 
> I stand over my opinion that a Revenue Audit acts as a good check that you are doing everything correctly.
> If you are compliant, there is no need to engage your accountant or auditors to help with the audit. Many Revenue audits are called "desk audits" and don't even involve a visit to the business premises & therefore should not involve a great deal of lost time in terms of day to day operations. They are particularly useful in new companies, where the owners would welcome guidence that their procedures are correct.
> ...


I have to question your opinion as regards real world matters - anyone whose opinion is that Company owners would welcome Revenue audits has 
to be detached from day to day business activity.


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## Recam (20 Sep 2007)

roadrunner said:


> I have to question your opinion as regards real world matters - anyone whose opinion is that Company owners would welcome Revenue audits has
> to be detached from day to day business activity.


 
What world other than the real world do you think I operate.

You still don't get my point, because you have a blinkered view of Revenue Audits, I'm simply looking at it from a different angle, I can appreciate your view on Revenue Audit and in probably the majority of cases your view is bourne out, but then the majority probably have something to hide.

I'll have you know I'm very much in the middle of day to day business activities and in this area of work.
My opinion is also shared by some of my colleagues.

Fair enough if you don't agree with my opinions but why make assumptions of how detached I'm from day to day business (not called for !)


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## efm (20 Sep 2007)

Recam said:


> I note from a previous mail that you are not an Accountant, so I assume (rightly or wrongly) your experience of Revenue Audits is limited.
> 
> I stand over my opinion that a Revenue Audit acts as a good check that you are doing everything correctly.
> If you are compliant, there is no need to engage your accountant or auditors to help with the audit. Many Revenue audits are called "desk audits" and don't even involve a visit to the business premises & therefore should not involve a great deal of lost time in terms of day to day operations. They are particularly useful in new companies, where the owners would welcome guidence that their procedures are correct.
> ...


 
Ok. Fair points; and you're right my experience of Revenue Audits is limited.

My opinion was formed from my dealings with, and experience of, Revenue, auditors, business owners, accountants etc. Your opinion is formed from your experiences - such is the great diversity of life!

If we compared experiences and knowldge in depth your opinion could very well turn out to be more correct


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## ssap16 (20 Sep 2007)

No engagement letter in the world makes an accountant responsible for errors in the books, records or procedures of a non-client. (in this case, the OP's supplier)

Quite right but it does contain paragraphs on care and attention. I feel that this has not happened here. You have to admit that it is unreasonable for this error not to have been spotted by either the bookkeeper or the accountant. I am saying that the accountant needs to be reminded that he has a duty of care not to accept everything that is thrown at him. This is not auditing but just commonsense. He does need reminding in this case that care and attention is required. I am not asking for him to pay them money but he should be reminded that the OP is a customer with other options available to him including a more attentive accountant. Dependant upon the T/O a simple trawl through the invoices would have highlighted the problem.


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## roadrunner (20 Sep 2007)

Recam said:


> What world other than the real world do you think I operate.
> You still don't get my point.
> I'll have you know I'm very much in the middle of day to day business activities and in this area of work.
> My opinion is also shared by some of my colleagues.


Please don`t let me keep you from your work - I`m sure you and your colleagues form one mighty & theologically perfect business unit!


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## Recam (20 Sep 2007)

roadrunner said:


> Please don`t let me keep you from your work - I`m sure you and your colleagues form one mighty & theologically perfect business unit!


 
  How does a post like this help anyone ?


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## Recam (20 Sep 2007)

efm said:


> If we compared experiences and knowldge in depth your opinion could very well turn out to be more correct


 
Not "more" correct but just appropriate to certain circumstances.
Thanks.


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## roadrunner (20 Sep 2007)

Recam said:


> How does a post like this help anyone ?


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.


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## ubiquitous (20 Sep 2007)

ssap16 said:


> (engagement letter)... Quite right but it does contain paragraphs on care and attention.



Not the ICAI standard engagement letter for non-audit clients, as set out in Miscellaneous Technical Statement M41, which actually never uses the term "care and attention" and restricts itself to a single sentence "We will perform the engagement with reasonable skill and care".

I maintain my belief that this does not extend to being responsible for invoicing errors on the part of third-party suppliers.

You ignored my earlier request for you to clarify whether or not you are an accountant yourself. Perhaps you might please now do so?


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## Recam (20 Sep 2007)

roadrunner said:


> 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.


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## simplyjoe (20 Sep 2007)

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.


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## ubiquitous (20 Sep 2007)

simplyjoe said:


> 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* , not *simplyjoe*  who posted the previous comments I queried. The mind boggles...


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## capall (20 Sep 2007)

roadrunner said:


> 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


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## roadrunner (20 Sep 2007)

capall said:


> They cannot retrospectively collect the vat like this
> It is their problem not yours


Is this correct - have you a professional knowledge of these sitations?


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## Crugers (20 Sep 2007)

> 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?
		
Click to expand...

_ 
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...


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## roadrunner (21 Sep 2007)

Crugers said:


> 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.
> ...


 
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)


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## Recam (21 Sep 2007)

roadrunner said:


> 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.


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## Nige (21 Sep 2007)

Send in a letter to the Revenue explaining the situation and include a copy of the VAT invoice.


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## roadrunner (21 Sep 2007)

Recam said:


> 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!


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