Stay on top of compliance issues
Recently I’ve met a few new business owners who were given incorrect information about their VAT threshold and the fact that they had to register for VAT.
The issues only came to light after revenue had raised queries but the people themselves had checked with their accountants and either misunderstood advice or were given incorrect advice. A quick check online could help avoid these type of issues. Check out the revenue website if you feel you may have issues (link below).
Any taxes unpaid will always need to be repaid to revenue by the taxpayer. I’m suggesting that you get confidence around your compliance issues by taking back some of the control / power. Looking for advice or a second opinion on advice received, should always be the correct procedure, but in the instances I’ve come across lately, unfortunately the people involved trusted the advice and even though internally doubted it and hadn’t checked with another source.
VAT tends to cause the most amount of hassle for new businesses trading B2B and B2C here or online or across the EU. Understanding the 2/3’s Rule or the revenue obligations specific to your business can be confusing.
This article is a reminder to get advice when you start doing something new within your business. Don’t wait or wonder about tax implications. Find out early. This may affect your pricing model and your business model as a whole; for example if trading online B2C in other countries across the EU and outside the EU.
There are self accounting rules for purchases of services from EU countries and specific wording invoices must have on them to be ‘valid’ from a revenue point of view, and it’s your obligation to understand these in a timely manner (if you don’t have active involvement from a management accountant or qualified individual). Wording on a VAT invoice
At start-up make sure you have an advisor who will give you the information or go through your queries with you. Be smart and ask for costs upfront, so you don’t get landed with an unexpected fee note that puts you under pressure. Work with an advisor who assists start ups and will understand your needs and level of understanding.
The Revenue’s website is very user friendly. Checking out information yourself is helpful. If unsure of the implications of what you read, run it by your advisor to ensure you fully understand it, and are applying the correct rules.
Compliance can be painful, but usually only if correcting previous errors or if you find you have issues ‘after the fact’. Stay on top learning what you need to know. It will help you feel in control and give you confidence around setting your prices or agreeing new contracts (with a fully understanding of potentially the VAT cost to your business).
Do you ‘learn one new thing every day’? If not, taking small steps towards increasing your knowledge on taxes is a great place to start for any business owner. Get an overview awareness of taxes that might affect your business.
See revenue link for some information that may be of use VAT – Revenue link
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