Taxman wants us to review our books- coffee shop

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Banking2006

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i set up a small coffee shop in the Kildare area in mid 2006. I registered for vat at the time as i felt that the purchase of equipment etc might make it easy to claim back vat etc. However, after a few months opne- i discovered turnover would not exceed the threshold in the first year. i sent not vat returns.

My records for the first 4 months of business were haphazard. Records from October on are better and records from now are better again!

Now i have to reply to tax office to say whether or not i will make a voluntary disclosure re. regularising my records

any tips or advice- as i said above, my initial records are not good etc

Please help!
 
I cannot possibly gibe you VAT advice based on your posting. I think you urgently need to engage an accountant and get him/her to review your books/do up correct books and see what your VAT position is.

If you have underpaid any taxes making a Voluntary disclosure can be extremely advantageous, as the potential interest and penalties will be mitigated.
 
thanks for advice

yes- we have 60 day period to make such a disclosure

anyone any idea how i would make a spreadsheet etc with details of expenditure and vat etc - we would then have a lot of work done for accountant when we go
 
Banking2006 said:
yes- we have 60 day period to make such a disclosure

anyone any idea how i would make a spreadsheet etc with details of expenditure and vat etc - we would then have a lot of work done for accountant when we go
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You have 60 days - call an accountant asap. In a situation like this a good one will be worth every cent.

As regards your records, check the usuals - bank receipts, statements of accounts from suppliers, till receipts... the accountant should be able to advise you further!
 
Banking2006 said:
thanks for advice

yes- we have 60 day period to make such a disclosure

anyone any idea how i would make a spreadsheet etc with details of expenditure and vat etc - we would then have a lot of work done for accountant when we go
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I can e mail you some basic exel spreadsheets which will help you analyse all VAT purchases and a cheques journal if you want. Should help you keep the accountant's time down
 
Thanks for advice- so it's not end of the world- at least we only have a few months of operation

Can the taxman extend to paye/ prsi etc payable for employees?

when is our tax year end if we commenced in May 2006

many thanks for support- was stressed last night!
 
The tax year runs from 1 January to 31 December but what you are assessed on for that year will depend on what date you make your accounts up to.

[broken link removed] is a link to the Revenue Commissioners Code of Conduct for a Revenue Audit. I think they can extend the audit but only if they find something suspicious - and if they do i think they have to give you due notice etc.

You really need to speak to someone about this - preferrably a tax advisor or accountant that has some experience in dealing with this.
 
We have no bank or records for first 3 months

any suggestion what to do?

also have no copy of excel- anyone recommend where i should get?

we had so many new things when business was starting that we ignored all this- now business is up and running it will be easier for future if we can get through this
 
You need to get an accountant on the job as has been said several times above.
 
Just re-read you initial post again. Is it the case that you registered for VAT in the first place but then decided that you fell below the threshold and therefore didn't submit returns.

Unfortunately, if you fall below the threshold for VAT then you have the option of whether or not to register for VAT. However when you opted to register for VAT, you are obliged to file VAT returns. The solution at the time would have been to deregister for VAT. Water under the bridge now.

You really should talk to an accountant / tax advisor. A lot of what will happen depends on your specific circumstances. Did you sell much in the first 3 months while setting up? If your costs were high (and accordingly your VAT on inputs high) but sales low (and VAT on output low) then you may not have a liability for those 3 months.

There has to be some records available - who supplied you with your supplies for the coffee shop - talk to them and see if they can give you a list of products they sold to you and whether VAT was charged on it. It'll be a help.

The bottom line is that there are outstanding VAT returns (probably the reason you were called for the audit) and need help.
 
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Newby and everyone - thanks for all your feedback- much appreciated.

Yes we registered and in hindsight, probably shouldn't have! but we will be ok with invoices etc as we have most of them. just no till receipts etc for initial period and till receipts up to end of 2006 do not have breakdown of vat. so...?
 
Before doing anything else the best option is take out the initial letter recieved from the Revenue and give the office a call. Revenue officials are now only too happy to help where there has been a genuine misunderstanding as appears to be the case with you. Give them full details of your situation and they will advise you exactlt what to do. No need for panic an audit situation would only arise if you continually ignored correspondence from them.
 
BrenG said:
Before doing anything else the best option is take out the initial letter recieved from the Revenue and give the office a call. Revenue officials are now only too happy to help where there has been a genuine misunderstanding as appears to be the case with you. Give them full details of your situation and they will advise you exactlt what to do.
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Is this a bright idea? I think not. Confessing over the phone to having no records, for example, will not do any favours for the OP.

BrenG said:
No need for panic an audit situation would only arise if you continually ignored correspondence from them.
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Er, I thought that this had already happened?
 
I don't think we are the audit stage yet- it is a prior stage i imagine as the Revenue have no records of vat returns. They want us to 'come clean' and submit a voluntary disclosure within 60 days. I'm sure if they are not happy with that, an audit will happen!
 
One way or another you need an accountant/tax advisor to assist you with any declarations/returns to be made and to hopefully mitigate any potential penalties etc.
 
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