VAT Inspection
Discussion
I registered for VAT bang on 6 years ago. In that time, I submitted one return about ten minutes late and got the standard telling off letter for that but other than that, everything submitted and paid on time.
I've just had the VAT lady on the phone and she is sending out an inspector to look at the previous four years vat.
What can I expect? Do they just look at how you have calculated VAT and the purchase invoices you have etc? Mine are very crude and simple accounts, prepared on excel. I have a bunch of invoices relating to each quarter.
So, say I buy something for £1200 including VAT at 20%, and sell it for £2400 including VAT, I pay £200 to HMRC in VAT and rest is taxable profit. I haven't made any exports in that time.
I hold stock. So when I buy something, I complete a purchase order with details of purchase price etc. And then when I sell it, it becomes part of that Quarter's VAT return.
I haven't reclaimed any VAT in terms of phone bills, VAT charged on computers etc in this time - mainly out of laziness.
I'm a full time final year medical student and so really don't have any time but they need to do their job. Is there anything I can do to make things super smooth and efficient for their visit?
Any advice will be gratefully received. I've paid out between 5k and 12k on each return during this period, if that makes any difference to how much detail etc they will want to go into.
I've just had the VAT lady on the phone and she is sending out an inspector to look at the previous four years vat.
What can I expect? Do they just look at how you have calculated VAT and the purchase invoices you have etc? Mine are very crude and simple accounts, prepared on excel. I have a bunch of invoices relating to each quarter.
So, say I buy something for £1200 including VAT at 20%, and sell it for £2400 including VAT, I pay £200 to HMRC in VAT and rest is taxable profit. I haven't made any exports in that time.
I hold stock. So when I buy something, I complete a purchase order with details of purchase price etc. And then when I sell it, it becomes part of that Quarter's VAT return.
I haven't reclaimed any VAT in terms of phone bills, VAT charged on computers etc in this time - mainly out of laziness.
I'm a full time final year medical student and so really don't have any time but they need to do their job. Is there anything I can do to make things super smooth and efficient for their visit?
Any advice will be gratefully received. I've paid out between 5k and 12k on each return during this period, if that makes any difference to how much detail etc they will want to go into.
As long as everything is clearly laid out, and you have answers for any questions they might have, you will have nothing to worry about, although you may consider employing a decent accountant, they are not expensive if the job is easy and straightforward.
That seems rather a lot of money to pay out, as you are a medical student.
That seems rather a lot of money to pay out, as you are a medical student.
As a practicing accountant, if your accounts schedules and quarterly returns are clearly laid out with back-up documents (ie valid VAT invoices), you should be fine.
FYI they usually only review 2 quarters, 1 from each of the past 2 years and only if there is an irregularity will they review further.
One tip - make sure you can reconcile your Box 6 VAT return outputs (sales) to your annual accounts - I have had this asked on most client visits.
Get in touch via PM if you have any more questions.
David
FYI they usually only review 2 quarters, 1 from each of the past 2 years and only if there is an irregularity will they review further.
One tip - make sure you can reconcile your Box 6 VAT return outputs (sales) to your annual accounts - I have had this asked on most client visits.
Get in touch via PM if you have any more questions.
David
We had a VAT inspection about a year ago. My bookkeeper took care of it all and there were no problems at all. In fact the inspector found that we were owed £1k in VAT that we had accidentally said was duty on a shipment from China! So a result in the end.
They told us over the phone they want to look at last 4 years but what happens is the inspector starts with the most recent and goes back 2/3 quarters and if it all seems water tight he wont waste anymore time looking. It's only if your books are a mess and he thinks you owe VAT that he will go further back and with more of a fine toothcomb.
As long as you have done everything properly then there is no need to worry.
They told us over the phone they want to look at last 4 years but what happens is the inspector starts with the most recent and goes back 2/3 quarters and if it all seems water tight he wont waste anymore time looking. It's only if your books are a mess and he thinks you owe VAT that he will go further back and with more of a fine toothcomb.
As long as you have done everything properly then there is no need to worry.
We've had two inspections in the last 20 odd years.
Never had a problem to be honest.
If they ask for something to look at make sure you find it or appear to make a very good effort to find it.
If they detect the slightest hint of you being uncooperative they will make life difficult for you.
Never had a problem to be honest.
If they ask for something to look at make sure you find it or appear to make a very good effort to find it.
If they detect the slightest hint of you being uncooperative they will make life difficult for you.
I've had 2 in the last 2 years , one was a full inspection going over a full year . We export a lot so our claims are fairly big
I found them to be helpful and friendly , much more so than any other hmrc department . They realise you will make 'mistakes and if you are honest they let it go , deliberate fraud though , good luck
I found them to be helpful and friendly , much more so than any other hmrc department . They realise you will make 'mistakes and if you are honest they let it go , deliberate fraud though , good luck
I wouldn't worry too much about the inspection. Most importantly, ensure all your paperwork is in order, purchase invoices, sales receipts, expenses, bank statements etc etc.
The easier it is for the inspector to verify all your paperwork, the quicker the visit will be completed. The inspector will sit down with you at the end of the meeting and discuss any issues/findings.
If everything is in order, you may not see an inspector for another 6 years!
We have a visit every few years and have been advised on each occasion that paperwork is key, especially when exporting goods.
The easier it is for the inspector to verify all your paperwork, the quicker the visit will be completed. The inspector will sit down with you at the end of the meeting and discuss any issues/findings.
If everything is in order, you may not see an inspector for another 6 years!
We have a visit every few years and have been advised on each occasion that paperwork is key, especially when exporting goods.
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