100K Back Vat due - help!

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!!
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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.
 
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:
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.
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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.
 
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.
 
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 !
 
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 !
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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!
 
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 !
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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.
 
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.
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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'.
 
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.
 
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.
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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'.
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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?
 
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!
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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.
 
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.
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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 ?
 
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.
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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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.
 
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.
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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 !)
 
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.
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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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
 
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.
 
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.
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Please don`t let me keep you from your work - I`m sure you and your colleagues form one mighty & theologically perfect business unit!
 
efm said:
If we compared experiences and knowldge in depth your opinion could very well turn out to be more correct
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Not "more" correct but just appropriate to certain circumstances.
Thanks.
 
ssap16 said:
(engagement letter)... Quite right but it does contain paragraphs on care and attention.
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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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