VAT audits are the elephant in the room that Irish businesses don’t like to talk about. For any business, audits can be hugely time-consuming and stressful.
It is not unusual for unprepared business owners to spend close to 100 hours just compiling information for a VAT audit, which can come as a considerable time cost for your business. In addition, to your time, if you are unable to accurately explain the treatment of sales or purchases in your business from a tax perspective, the Revenue may impose charges.
However, with the correct advice and systems in place, you can save time, money, and stress trying to find relevant information. Simply put, the easiest way to avoid a potential VAT audit is to ensure your financial records are up to date and easily accessible. This ensures you will be able to clearly answer any Revenue queries before they become audit issues.
We have found from years of experience that we are better at dealing with Revenue directly rather than the client dealing with them. That is because we understand what Revenue is looking for and we understand where to look for it on behalf of our client.
What Is A VAT Audit?
Essentially it is officers of the Revenue Commissioners examining your tax returns and records. What they are trying to assess is that income, chargeable gains, and profits have been correctly calculated and that none are omitted from the return. A VAT audit may also be carried out to check that the tax credits, reliefs, etc., claimed are due.
Steps Before A VAT Audit
Before choosing to undertake a VAT audit Revenue may request information from you as the business owner. For example, this may involve requesting details about a sudden jump in VAT returns, which has been flagged in their system. A point of information here, whether aperio acts on your behalf or not, don’t ignore such a request for information from Revenue. Make sure you engage or you may be sending the wrong message.
The next level of interaction may be an aspect query where Revenue are looking for clarity on some area of your business. This will generally require a visit to your premises. They will let you know when they plan on visiting your premises to look at your records, so you have time to pull together the information they need.
Having up-to-date financial records and good processes in place from the outset make it far easier to answer Revenue requests for information or aspect queries. And in the process reduce the chances of a VAT audit.
Discuss Your Queries On VAT Audits
If you need help with an upcoming VAT audit or wish to get your records in order to avoid a VAT audit altogether, aperio can help.
Get started by booking a discovery call with our team through our Calendly or give us a call on +353 (0) 21 242 7950