Sole Trader Wants to shut down, Can I avoid VAT Settlement?

D

dmb

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Hi,
Iv been a sole trader for around a year and a half now, however, recently business has got really bad and I would like to de-reg. I have an Accountant who im not at all happy with as he keeps advising me to stick things out !.. ( As it will see him get money from me in my opinion !.. ). I have reclaimed VAT since I first registered approx 18 months ago which maybe totals up to €4000 - €5000 and unfortunitly due to the business not really taking off iv been reclaiming more than iv been paying in. I understand that in order for me to dereg i need to repay the €4000 - €5000 i have reclaimed, however I am not currently in a possition to do this as i couldn afford it. The money which was reclaimed was spent usually on advertising ect so basicly im wondering is it possible to dereg some way in which i can avoid repaying the VAT?..
I look forward to your advice and thanks for your help.
 
I don't know, but I hope not.

This is money which you owe the taxpayer.

Effectively, you got a loan from the taxpayer, so you should repay it.

Brendan
 
1) If you are unhappy with your accountant perhaps you need to consult a different one.

2) If you elected to register VAT while not obliged to do so, e.g. through being under the registration threshold, then you must pay back any excess VAT claimed on cancellation. This is not the same as a trader who was obliged to register, did so and then has to close. You need to see which of these you are. Part 2.18 of Revenue's Guide to VAT has the relevant details.

www.revenue.ie/en/tax/vat/leaflets/vatguide_2008.pdf
 
I echo the above sentiment. People should not stick with an accountant that they are not happy with. Communication is very important. Saying that maybe your accountant is right!
Basically if you registered because you were obliged to any assets remaining in the business is treated as a self supply at the date of de-registration and you need to pay back VAT which is calculated on the market value of the remaining assets. Say van and stock valued at €10,000 then you pay back €1,736.
 
I have an Accountant who im not at all happy with as he keeps advising me to stick things out !.. ( As it will see him get money from me in my opinion !.. )
Click to expand...

It's very unlikely that an accountant is advising someone to stick out just so that they can keep getting fees. He would be very foolish to do that.

But by all means, get a second opinion.

Brendan
 
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