VAT investigation - Help!! CONFUSED

[namsey]

We're a newish company and when I submitted my first Vat return, a gentleman from HMRC came to look at invoices, receipts, bank statements, machines ect. Every penny was accounted for, I actually under claimed so everything was signed off and I got my money back Large amount as we bought machines on HP - more than £100k

VAT RETURN WAS DUE YESTERDAY -

The machines haven;t worked properly since we bought them and they won't repair them as it's too costly, after getting a solicitor involved, they have agreed to give us new machines. They are 'doing us a favour' by cancelling the first agreement without any penalities, no deposit on the new machines or install charges BUT

we have to sign new agreement, no refund on any money we have paid upto date, no deposit refund no vat refund, no refund on installments.

We're ok with that as we don't have to pay deposit on the new machines, and we get 15% of the price, and brand spanking new machines, what we've paid and no deposit and 10% off balances off, EXCEPT FOR THE VAT!!!

I now have to pay a large amount of Vat again from my business account to the finance company, all legit & above board ,my questions are:

a, will the vat man come knocking again?
b, will I have to go through the same palava again? 6 HOURS LAST TIME!!!
c, how often do you get a Vat inspection?
d, will we go 'under the radar HMRC' each time we submit a claim?
e, can this be done via post? or do they have to come and see me? We're a family run business and I don't have 6 hours to spend as I deal with ALL the admin,sales,ect.

[MarillionFan]

Ask your accountant.

[eek]

Two points

1) management is the art of delegation. Get an accountant / bookkeeper to do your accounts. At least then it won't be your return.

2) Given that you VAT return is late they may investigate something that looks dodgy. They may not. My advice would be implement point 1 and start worrying about other things.

[cojak]

A 6 hour palave with the VAT that you don't have time for?

I suggest that not only do you MAKE TIME for it, you get out your best china, hand make the biscuits and put on your best smile.

We may complain about HMRC, but we're talking Customs and Excise here. A very different beast. Efficient and ruthless if they think you're diddling them.

In my dealings with them they are firm but fair and I make sure not to get them angry. VAT men scares the tulipe out of contractors and we make sure that they are the FIRST bill we pay.

Call your accountant, if you don't have one call the VAT on 08450 010 9000 . Talk to them, it'll be much, much worse if you don't ,

[Alan @ BroomeAffinity]

And get some enquiry insurance for about £150 per year. And then you'd be able to hand most of this off to your accountant.

[eek]

And get some enquiry insurance for about £150 per year. And then you'd be able to hand most of this off to your accountant.

That only works if your affairs are very very (contractor with 1-5 customers) simply.

£100,000 of lease finance is not the type of company that will be accepted for £150 enquiry insurance.

[cojak]

...and don't forget to get advice from the VAT man on how to do it properly next time.

You're a business, start acting like one.

[Alan @ BroomeAffinity]

That only works if your affairs are very very (contractor with 1-5 customers) simply.

£100,000 of lease finance is not the type of company that will be accepted for £150 enquiry insurance.

Your bang wrong on that I'm afraid. I've administered such a scheme through a general accounting practice and all businesses are covered, subject to usual caveats of returns being submitted honestly, no fraud etc.

[DaveB]

We're a newish company and when I submitted my first Vat return, a gentleman from HMRC came to look at invoices, receipts, bank statements, machines ect. Every penny was accounted for, I actually under claimed so everything was signed off and I got my money back Large amount as we bought machines on HP - more than £100k

VAT RETURN WAS DUE YESTERDAY -

The machines haven;t worked properly since we bought them and they won't repair them as it's too costly, after getting a solicitor involved, they have agreed to give us new machines. They are 'doing us a favour' by cancelling the first agreement without any penalities, no deposit on the new machines or install charges BUT

we have to sign new agreement, no refund on any money we have paid upto date, no deposit refund no vat refund, no refund on installments.

We're ok with that as we don't have to pay deposit on the new machines, and we get 15% of the price, and brand spanking new machines, what we've paid and no deposit and 10% off balances off, EXCEPT FOR THE VAT!!!

I now have to pay a large amount of Vat again from my business account to the finance company, all legit & above board ,my questions are:

a, will the vat man come knocking again?
b, will I have to go through the same palava again? 6 HOURS LAST TIME!!!
c, how often do you get a Vat inspection?
d, will we go 'under the radar HMRC' each time we submit a claim?
e, can this be done via post? or do they have to come and see me? We're a family run business and I don't have 6 hours to spend as I deal with ALL the admin,sales,ect.

a, Probably not, depending on what your next return looks like. If there were big numbers involved and it was the first return of that size then it is likely that this is what trigger the last investigation. Being late with your next return and having similar numbers on it may trigger another visit although it's less likely.

b, if they vist again, then very probably. It's not a palava, it's a legal obligation and a consequence of being in business. If you don't want to deal with it yourself, get an accountant. Don't complain too much, you got a big chunk of cash back last time as a result. How much did that work out at as an hourly rate for the 6 hours?

c, The theory is that every company will get a VAT inspection every few years. In practice they tend to select based on complexity of the returns, history of late filing and any other risk factors they think may indicate that VAT is not being properly paid. Get you current return in pronto.

d, See above. The likelihood of being picked up on the HMRC radar is related to the returns you make and how prompt you are in making them.

e, No, VAT inspections cannot be done by post. If you don't feel you can make time for this, get an accountant. From the sounds of it, you need one anyway to make sure your returns are correct to begin with.

Otherwise, as has been said, don't piss of the VAT man. Revenue and Customs have a history, some would say a tradition, of coming down hard on those they suspect may be fiddling their returns. There is a reason you don't see stories in the press about big business being let of their VAT bill as opposed to their corporation tax. Show them some respect, they've earned it.

[SarahL2012]

I've been in finance all of my working life and a visit from the VAT man is one we all dread. If they think its something relatively minor then they will often ask you to post certain pieces of information to them in the first instance, but otherwise they will require a face to face review. Incidentally they can turn up unannounced if you avoid their requests.

Personally I agree with many of the other posts on here that you need to get yourself an accountant who specialises in small businesses. Most of them save their fees many times over by ensuring you keep out of trouble (with VAT, corporation tax, NIC, PAYE and companies house returns) and if someone from HMRC comes calling then they will deal with them in the first instance. It also allows you time to concentrate on running your business.

And get your VAT return in - delays make them unhappy.