Munster’s first independent VAT consultancy practice providing specialist VAT and Indirect tax advisory, assurance and interim management support services to owner managed businesses, small & medium enterprises, accountants and legal practices.

The VAT Practice: managing VAT

Tuesday, March 27, 2018

by Nick Ryan

As with the rain, VAT does not go away and is a constant dampener for many businesses. This, together with Revenue’s heavy handed approach to the management of VAT compliance and their increasing route of higher penalties it is important for businesses to manage their VAT affairs with due care.
Here a couple of pointers of some of the type of work we undertake and some useful pointers for your clients to consider.
Business re-structuring
Following the end of the year many businesses look to re-structure their operations, either acquire new investments/assets or, dispose of an operation or asset. Some will look for ventures or expansion overseas or look to refine processes to reduce costs. For some businesses the position of VAT itself is a cost worthy of review. Also, given the possible impact of Brexit, many businesses who operate through the UK to transact into Europe or, who do business in the UK will need to consider the various options in managing their business interests post Brexit to ensure the impact is minimised.
Any re-structuring carries a VAT health warning and the VAT Practice can provide input as follows:
• Completion of high level reviews of the overall operation to assess both that the VAT imprint is correct and the VAT risk for error; it is worth noting that a failure in compliance can now result in a high VAT cost to a business.
• Overview of cross border operations to ensure VAT compliance procedures are in place and operating correctly. Confirming whether there is a need for multi jurisdictional VAT registrations and provide guidance on improving VAT efficiencies.
• Clarification on the application of VAT to a particular transaction, asset acquisition or disposal.
If your client is looking at re-structuring or making efficiencies then please contact us to see how we can be of assistance.
Property disposals and acquisitions
Although the new rules introduced in 2008 have been in place for some time it is surprising how little is understood of them. We have encountered many cases where transactions have misunderstood the application of the rules and, which have resulted in significant VAT costs to the persons involved; in some cases these have resulted in six figure VAT assessments.
The VAT Practice can provide you and your client with a complete property transaction package whereby we:
• We provide the clarification on the VAT treatment to be applied.
• Provide guidance on the management of any VAT issues and costs identified.
• Provide guidance on the ongoing position and how it can be managed.
• Complete the Pre-Contract VAT Enquiries form.
• Confirm the VAT clauses for the Contract of Sale.
• Provide a draft VAT invoice for the client.
This service is provided on a fixed fee basis for single property transactions. For more information on the services then please contact us.
Distance Sellers
The drive to selling indirectly and to the wider European market is accelerating though the VAT compliance obligations are often falling by the wayside. The position of Distance sellers has been further muddied by the introduction of MOSS for telecoms, broadcasting and electronic service providers.
Distance sellers need at this time to re-visit their sales for 2017 to determine whether they are required to register for VAT in any other EU Member States. It is important to register as soon as possible after the breach as the penalty regimes of some jurisdictions are very severe.
The VAT Practice can provide a one stop shop for distance sellers in determining breaches, arranging registrations and managing the VAT compliance and reporting requirements. Should your client require assistance then please contact us to discuss.
Holiday Cottage scheme investments
We are all aware of the massive uptake in the property boom of people investing in holiday cottage schemes, hotel suite schemes, golf course accommodation schemes and residential/retirement home schemes. This was to take advantage of the suite of tax shelters available at the time and the belief that the rise in property values would not falter.
A number of the schemes are beginning to unravel and some are highlighting basic mismanagement of the scheme itself. In both cases the VAT risk largely lies with the investor, the majority of whom may well be oblivious to what is happening and may be too late in taking any possible steps to shore up their VAT position. For those investors we have identified as having a VAT liability we have no choice but to
So what should investors do? Take stock of their investment and look at the worst case scenario. The VAT Practice can provide investors with a timely review together with options for how best to manage their potential ticking VAT time bomb and perhaps, just stop the clock.
For more information on how we can assist investors please contact the VAT Practice.
Contact Nicholas Ryan by email: info@thevatpractice.ie or, by telephone, 023 8838181

Tags: VAT advice, VAT advisers, VAT and brexit, VAT and holiday home investments, VAT and property, VAT and re-structuring, VAT consultancy services, VAT News, VAT reviews, vat support services