VAT inspection - The Book-keepers Forum (UK)

Rhianrach · Expert

VAT inspection

RobH · Expert

I think the worst that will happen is they could charge interest on the underpayment, but it is such a small amount it would amount to next to nothing. I'm sure most vat inspections pull up more than £60 differences and if you didn't point it out they probably wouldn't have found it! You can put errors of upto £10,000 of VAT right the following quarter in any case.

What has prompted the inspection Steve?

AngelaWBS · Senior Member

Hi,

Over the years I have been through a few VAT inspections and found the inspectors to be friendly and helpful.

I don't think you will be fined, it is a small error that you would put onto the next return. You are not trying to hide anything and can explain your differences.

Let us know how you get on.

Regards

Rhianrach · Expert

RobH wrote:

I think the worst that will happen is they could charge interest on the underpayment, but it is such a small amount it would amount to next to nothing. I'm sure most vat inspections pull up more than £60 differences and if you didn't point it out they probably wouldn't have found it! You can put errors of upto £10,000 of VAT right the following quarter in any case.

What has prompted the inspection Steve?

According to the chap that informed us of the inspection it is due to being a new company (4 months old) and the fact that it is a butchers so the vat usually owe a lot to the company. He stated he just wanted to make sure everything was being done properly smile

Rhianrach · Expert

AngelaWBS wrote:

Hi,

Over the years I have been through a few VAT inspections and found the inspectors to be friendly and helpful.

I don't think you will be fined, it is a small error that you would put onto the next return. You are not trying to hide anything and can explain your differences.

Let us know how you get on.

Regards

It's not till May 5th or 6th so i'll let you know how it went.

Ironically I was just about to give them a call concerning the difference and how I deal with it, now I don't have to.

I've been advised to ply them with tea and biscuits and big smiles. biggrin

Shamus · Forum Moderator & Expert

Hi Steve,

companies always get a VAT inspection within their first 18 months. Sure that one or two may have slipped through the net but that's the general policy.

As has been said above the meetings are usually quite constructive.

And no being stingy with the biccies. Mcvities hob nobs and / or chocolate digestives seem to be the antidote to grumpy VAT inspectors.

Also, make sure that you've got invoices TO THE COMPANY!!!!! for absolutely everything and where multiple items are paid into the bank at the same time make sure that you have a fully descriptive note of what all of the items were.

You'll be fine though as I know your a bit of a perfectionist anyway.

Keep us in the loop,

All the best,

Shaun

Rhianrach · Expert

Shamus wrote:

Hi Steve,

companies always get a VAT inspection within their first 18 months. Sure that one or two may have slipped through the net but that's the general policy.

As has been said above the meetings are usually quite constructive.

And no being stingy with the biccies. Mcvities hob nobs and / or chocolate digestives seem to be the antidote to grumpy VAT inspectors.

Also, make sure that you've got invoices TO THE COMPANY!!!!! for absolutely everything and where multiple items are paid into the bank at the same time make sure that you have a fully descriptive note of what all of the items were.

You'll be fine though as I know your a bit of a perfectionist anyway.

Keep us in the loop,

All the best,

Shaun

Cheers, all invoices are present and correct (but i'll double check smile

just to be sure).
As for biccies well it just so happens that on their deli counter they have homemade chocolate caramels that should be ok. smile

Thanks for all your input folks and I shall let you know how it goes.

AngelaWBS · Senior Member

Mmmm, I like biscuits biggrin

RobH · Expert

I think nowadays very few companies get a vat inspection in their first five or six years, they just don't have the staff anymore.

Shamus · Forum Moderator & Expert

Hi Angela,

for an unlimited supply of top notch biccies have you thought of a career as a VAT inspector?

Hi Rob,

I thought that the initial inspection was still a priority but I have heard that the clients of certain accountants get visits more than others so maybe they're just being more selective now on the ones that get through the net and if the accountant is recognised as a good one then they're less likely to get a visit.

Just a guess there with absolutely no evidence to back it up whatsoever so could be completely wrong.

Talk later,

Shaun.

semsley · Guru

Usually anything unusual triggers a VAT inspection. For example a company which has always paid the VATman suddenly has a rebate or vice versa. One of my charities used to fluctuate between refund and payment of around £5K either way then, because of a major refurbishment for which funding had been gained they had a huge refund - VAT visit.

I've just been accepted as a MIAB (on my very old qualifications and experience) so it's bye bye to HMRC for me. Hopefully I'll be able to upgrade to FIAB when I get the result of the L3 Diploma I took in March with them.

Shamus · Forum Moderator & Expert

Congratulations on your MIAB Sheila,

are you going to do the level 4 International Financial Reporting paper? I really fancy that one as up until now everything I've done has been UK GAAP which of course disappears in 2012.

You've got me worried on the VAT now as after twenty years of paying out I actually got a £114 refund this quarter... Oh dear! Free inspection with every refund!

semsley · Guru

My next foray is the SAGE L3 which is still sat in the box on the shelf above the desktop.

I've also just signed up for a free train the trainer course in financial awareness. Thought this might bring in a fair bit of work because I believe one of the government priorities was for the training of young people in financial awareness so teachers will need to learn how to do it. Most of them are financially illiterate, I know when I worked in college I spent half my time stopping the English teacher making huge financial mistakes.

Rhianrach · Expert

semsley wrote:

Usually anything unusual triggers a VAT inspection. For example a company which has always paid the VATman suddenly has a rebate or vice versa. One of my charities used to fluctuate between refund and payment of around £5K either way then, because of a major refurbishment for which funding had been gained they had a huge refund - VAT visit.

I'm assuming it's because they owe us and they want to make sure that this is the case, I hope so anyways. hmm

Wella · Expert

Hi Sheila

Congratulations on MIAB

It may be a route I will take later this year. Did you have any problems, or was it a case of applying and them accepting your qualification?

Bill

semsley · Guru

No problems, I filled in the form (which you can download from the website) sent copies of my very very old certificates (1960s) also stuck in a CV, gave two referees who could comment on my competence got an email saying words to the effect that I had been accepted at member level, told me how much to pay, paid. Very painless process.

Rhianrach · Expert

Well as it turns out the inspection went very well no problems no fines no money owing either way and he was happy with the system.

He did point out various ways to claim even more VAT back and let us know that if we do a return once a manth then we will most likely avoid another inspection as there is a threshold and we are likely to breach it every time with quarterly returns.

So in conclusion I's a good boy, I did well boss. smile

Wella · Expert

Well done Steve

You can sleep at night now

Bill

Ann-marie · Senior Member

Well done Steve,

I bet your pleased that's done with now - it's always a little scary when HMRC come nosing round, but most of the time they are quite positive and helpful. I've had a couple of people in from HMRC over the years with my day job VAT and Gift Aid. I was pleased I had everything in order - the satisfaction of knowing that your doing everything right (even when you know deep down that you are) is always nice.

Well done again - hopefully you won't get another one for a while now.

Ann-marie

Rhianrach · Expert

Thanks Bill yep a sound nights sleep is in order, could of been awkward if it hadn't gone well as I've invited the owners over for my littluns birthday on Sunday. evileye

Thanks Anne-Marie you do feel a little warm glow inside when you have been assured your doing things right, I've only been doing it a few months so as far as I knew I could of been doing it totally wrong (however the owners did secure against that by getting an accountant friend in just to make sure) biggrin

Thanks again.

semsley · Guru

Well done Steve, always have confidence in what you are doing, you know it makes sense.

Rhianrach · Expert

semsley wrote:

Well done Steve, always have confidence in what you are doing, you know it makes sense.

Thanks I do try to be more confident it's just hard with things that are new to me.

Just need to find a job now and I'm set, should get a good reference though. aww

attilabenko · Guru

Hi Steve,

Where do you live? Are you anywhere near Bristol?

Attila

Rhianrach · Expert

attilabenko wrote:

Hi Steve,

Where do you live? Are you anywhere near Bristol?

Attila

cry no I'm up north East Lancs, and it's raining and I still need to get out and vote hmm