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Concerned over incorrect vat returns

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  • 29-10-2014 9:49am
    #1
    Bumbler
    Registered Users Posts: 48 ✭


    Hi guys,

    I'm not deliberately trying to make myself sound like an idiot in a bid to worm myself out of the mess I'm in but I'm trying to fix the accounting chaos I've caused by taking my eye off the ball.

    I'm not going to go into the sob story of having the past two years from hell but during a difficult time I allowed my business go into free fall. I made vat returns via ROS that were scatty, based on any sales and purchase invoices I had to hand.

    In recent weeks I've tried to fix the mess as best I could and did manage to reconcile it all. This has taken weeks to do.

    I met with an accountant who I informed of everything and told him the full story. He thinks I am owed a vat refund for 2013. I told him that I did not wish to be refunded this money as I believe that in 2014 I owe revenue money so I would like to offset the purported 2013 refund against 2014.

    I run sales invoice accounting and the accountant has found that I do indeed owe significant vat for 2014 due to non receipt of payment of sales invoices from customers, including some who have went into liquidation. Bottom line is I am now in major hock to my suppliers because I haven't paid them in over six months. I also owe vat on the invoices I issued to customers who haven't paid me. This obviously means I owe revenue back the vat element I reclaimed on the purchase invoices I received from the suppliers yet still owing the vat element on the unpaid sales invoices issued. I do not have the money to pay back revenue. Is this a jail offense?

    I have asked the accountant to rectify my vat returns and make corrections were I cocked up but he says this cannot be done. This sounds odd?????

    I am a sole trader so I cannot liquidate.


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    #2
    GR3YFOXXX
    Registered Users Posts: 54 ✭✭GR3YFOXXX


    I would confirm this with a specialist as I no longer work in the area. But VAT on sales invoices, whilst payable to revenue on issue, are actually recoverable as bad debts after non-payment following a 6 month period. These invoices should be appropriately credit noted if no payment in expected.


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    #3
    Bumbler
    Registered Users Posts: 48 ✭Bumbler


    Thank you very much for your response.

    I am considering closing my business down with immediate effect and handing back my vat number. I understand that I am personally liable for any liability too revenue or my suppliers and will try and have each and everyone of them paid.

    Can I technically chase unpaid debts if my business is ceased trading, taking into account that I m registered as self employed?


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    #4
    Theboinkmaster
    Registered Users Posts: 3,969 ✭✭✭Theboinkmaster


    Yeah if you raise a sales invoice with VAT and it doesn't get paid and won't be paid then you just raise a credit note for the same value so VAT offsets.


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    #5
    CFO4Hire
    Closed Accounts Posts: 5 ✭CFO4Hire


    Hi,

    If the customer is in liquidation you are unlikely to get paid and the account can be considered unrecoverable. You can write off this debt which will be important to correct your income position and also reverse the VAT position. Before you contemplate deregistering for VAT you should get a final view on your tax position and then make an informed decision on the best course of action.

    Regards
    CFO4Hire


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    #6
    Gard1
    Registered Users Posts: 90 ✭✭Gard1


    The most important thing for you to do is to get the correct returns to revenue. If they know what you owe them they are very reasonable in taking stage payments from you. The bigger question here though is whether your business is still profitable. If your business isn't making money then there is little point continuing if you are digging a bigger hole to get out of. Prepare proper management accounts month on month see if there are any costs you can cut and whether any deal you strike with revenue on a payment plan will work. There is one thing they don't like more than not getting the returns its people breaking arrangements!!!!


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    #7
    Bumbler
    Registered Users Posts: 48 ✭Bumbler


    Hi,

    To update this thread I closed down my business. I was paying revenue what I owed them but could only afford to pay them weekly x amount and could not afford to pay the down payment they sought so my case is currently in the hands of the sheriff. All I can say; for anyone who has dealt with the sheriff I have never been so stressed out in all my life. I live in fear of them arriving with Gardai to remove any thing from my house. I'm generally a nervous wreck since this all began.

    I had a review type scenario before I closed up shop; not really a full audit but did print off all my accounts and they took a copy of them away. It was decided I owed 15k in vat and that I was on a sales invoice accounting system. I realize that being so small I should never have been on such a system. Of course I agreed to anything just to see the back of the revenue but I am now paying a portion of my vat bill that I shouldn't be paying.

    How can I rectify this? Can I do so via ROS. By rectifying this will Revenue come back to haunt me again?

    Cheers


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    #8
    TiGeR KiNgS
    Registered Users Posts: 1,435 ✭✭✭TiGeR KiNgS


    Bumbler wrote: »
    Hi,

    To update this thread I closed down my business. I was paying revenue what I owed them but could only afford to pay them weekly x amount and could not afford to pay the down payment they sought so my case is currently in the hands of the sheriff. All I can say; for anyone who has dealt with the sheriff I have never been so stressed out in all my life. I live in fear of them arriving with Gardai to remove any thing from my house. I'm generally a nervous wreck since this all began.

    I had a review type scenario before I closed up shop; not really a full audit but did print off all my accounts and they took a copy of them away. It was decided I owed 15k in vat and that I was on a sales invoice accounting system. I realize that being so small I should never have been on such a system. Of course I agreed to anything just to see the back of the revenue but I am now paying a portion of my vat bill that I shouldn't be paying.

    How can I rectify this? Can I do so via ROS. By rectifying this will Revenue come back to haunt me again?

    Cheers

    Not sure what you mean here ? If you want to reneg on your agreement with Revenue you should really talk to a professional.


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    #9
    Bumbler
    Registered Users Posts: 48 ✭Bumbler


    Hi Tiger Kings,

    I think it best I start a new thread on this topic to update and bring my clarity.

    Thanks for your response.


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