The VAT Practice,
The White House, Cloncorban, Rossmore, Clonakilty,
Co. Cork
Principal: Nicholas Ryan
Tel: +353 (0)23 8838181
Mob: +353 (0)83 3340324
Fax: +353 (0)23 8838181
Email : info@thevatpractice.ie
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This investigation continues to make strides and, based on the reports we have received, continues to reap significant rewards for Revenue. The approach is the same, and it is important for dealers to understand the developments of this investigation and the need to address matters in order to avoid the strong possibility of losing their business.
My concern is the void that they have created between pre FA 2015 and post. You may note that Revenue’s Leaflet remains as it is but for the fact that it now confirms it is “Pre FA 2015”. Revenue provide no comment, guidance or proposal for managing any transitional changes required for those educational providers that qualified for the exemption pre FA 2015 and may now not do so. Nor is there any clarity as to whether the exemption remains in place for those private sector providers that cannot place themselves within the “recognised bodies” list.
The list of recognised bodies does provide some hope for private sector providers but, there is a need to tread with care in interpreting whether a business does qualify. Revenue has clearly signalled that the crossover to the revised legislation will need to be considered on a case by case basis.
Revenue’s approach is based on one document, the UK V5 vehicle registration document. This is supported by information provided under the VAT Information exchange System (VIES).
Revenue are driving the investigation either by Revenue audit or, in most cases, a Revenue enquiry letter. The officers have a list of the vehicles they are interested in. The assessment for VAT is generally understood by the officer prior to the visit. Officers are being instructed by Revenue head office to issue assessments BUT to look to agree a settlement based on one year. Overall, Revenue officers are openly confirming this investigation is likely to close your business.
What makes this different to other investigations is that the assessment arises from what Revenue perceive to be an error in accounting for VAT correctly on a supply made by a UK taxable person which provides them with the opportunity to assess for the VAT due on the end sale without any need to correct matters in the UK. As with intra EU transactions, where the supply qualifies as an intra-EU dispatch then the responsibility for accounting for VAT on the supply shifts to the purchaser hence Revenue’s stance that they have EU law to rely on and provides for an easy win assessment. Or does it?
From our understanding of Revenue’s approach it appears to be flawed.