Vat Audit

A

A99

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Hi,
would like to hear from any sole traders who have had a vat audit to get some idea of what to expect, how best to prepare etc ......

Thanks in advance.
 
Hi;
By asking to only hear from sole traders with vat experience I may have limited by chances of a useful reply so I would like to hear from anyone including experienced accountants who have experience of vat audits,

Thanks in advance.
 
Vat Audit........

Ensure that you have all records for the period in question.
These include,

Bank Statements (Details of lodgements, Cheque book anaylsis.)
Purchase Invoices
Sales Records
Sales Receipts
Copies of Vat returns and supportign schedules showing how the final liability or refund was arrived at.

Not advised: But in the practice I work in we put the revenue auditor in a cold filing room, what normally happens is that he/she doesnt stay too long, rushes over his/her checks etc, and ends up taking some the records with them for final checks.

If you have prepared for vat in the correct way then there shouldnt be any problems.
 
What will happen if there isn't receipts to back everything up ?
diesel fuel receipts for example ?
 
Kluivert said:
in the practice I work in we put the revenue auditor in a cold filing room, what normally happens is that he/she doesnt stay too long, rushes over his/her checks etc, and ends up taking some the records with them for final checks.
Click to expand...

The oldest and stupidest trick in the book and probably the best way to ensure that you get on the wrong side of the inspector.
 
A99 said:
What will happen if there isn't receipts to back everything up ?
diesel fuel receipts for example ?
Click to expand...

The normal practice is to disallow all claims for VAT deductions where the items concerned are not supported by valid invoices. If the amounts involved are large enough to require you to make a financial settlement to the Revenue, you will definitely need professional advice in advance of the audit.
 
ubiquitous said:
The oldest and stupidest trick in the book and probably the best way to ensure that you get on the wrong side of the inspector.
Click to expand...

Oldest and stupidest trick, my apolagises however I did say it was not advised, thats why I started the sentence with " Not Advised". Anyway if there is no where else for them to sit where can you go. Inspector has his or her job to do, thats understandable.

The best advice is to make sure that you operate vat properly and you wont have this problem. If you are able to show that you prepare your vat on a consistent basis and are not trying to deliberately rip them off then they will favour this. However if you have claimed Vat in situation where you shouldnt have then they will ask for the money back and will include interest and penalties.

Although I agree you will have to seek professional advice for the preparation of the audit.
 
What if its for a vat free (under 10k a year) , how does the auditor approach the job, as there is no vat to deal with?
 
Snape said:
What if its for a vat free (under 10k a year) , how does the auditor approach the job, as there is no vat to deal with?
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Is this a theoretical question because I'm not sure they would pick a non VAT registered trader for a VAT audit (as opposed to a wider Revenue audit)?

The only cirmcumstance where it might arise is if they were trying to establish if you should in fact be registered as they suspect you may be over the VAT threshold in which case I'd imagine their approach would be to try and verify if the turnover figure used as the basis for the exemption was correct.
 
What will happen where there isnt receipts to back up everything claimed, i.e. couldnt show a years till receipts for diesel but could show through bank statement a years record of weekly buying diesel using a credit for example ?
 
i think they will disallow them, you are supposed to have a receipt fo revery expense you claim vat back on. is the diesel much, most of the revenue are ok and wouldnt worry too much about small things being uncovered.
 
the main thing to remember is. If the vat inspector forgets to show his i.d before he begins the audit then you can ask him to leave. Well delay it for an hour and then ask him to leave.
Can and has happened and they have no choice but to leave as they broke the rules
 
" ......... then ask him to leave."

Will they not just make another appointment, & this time be realy p***ed off !
 
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