Revenue Audit

Soyouthink

I had a business which due to personal circumstances I was forced to close within 5 months of opening. When I opened initially I elected to register for VAT as I assumed I would break the threshold over the year. I reclaimed VAT on purchases I made in equipment etc in the set up of the business, and due to the short term I was opening my VAT payments to the revenue never exceeded my repayments due to the initial set up costs. The business closed without breaking the threshold.

I have not deregistered for VAT as I had intended on giving it another go when my personal matters were resolved however this never materialised.

I recently got notice of a revenue audit to take place in the next month- my problem is that on review of my VAT accounts I have made a number of errors in what I reclaimed and have lost many of the receipts for my purchases on which I claimed. I am worried that during an audit this may be perceived as deliberate. As my turnover never exceeded the threshold would it be acceptable to the revenue for me to make a qualifying disclosure prior to the audit admitting that I owe them the full sum of the refunds as due to my turnover was not obliged to register for VAT and therefore should not have been repaid on my purchases. The total sum I will owe is <€10,000- and as I currently work a PAYE job with no assets or savings I will have difficulty paying this unless through an installment plan.

My questions are:

a) Will the above qualifying disclosure ensure that I do not end up "in trouble" with the revenue regarding the VAT repayments
b) How do I make a qualifying disclosure on this matter is it simply a letter outlining the details above
c) Will revenue work with me to come up with an installment plan to pay the total sum owed.

This issue is causing me considerable stress as I lost a considerable sum of money in the business, desimating me financially, ruining my ability to get credit and now I have this additional financial burden on me. I am also worried that because my poor record keeping and errors that the revenue may think it is deliberate and initiate prosecution or something. Any help would be greatly appreciated. Thanks in advance.

dogsears

Sorry to hear about your financial troubles - definitely not the best time to have the prospect of a Revenue audit. So you may not want to hear that the best way to get properly advised about your situation is to pay an experienced advisor. Its a situation where you need to be able to have discussions, review records, consider approaches etc - the answers you get on this forum would certainly be earnest and attempt to be helpful but for the kind of in depth consideration you need, you should talk to a tax adviser.

Best of luck with it.

Dumb Juan

I agree ring a tax advisor/accountants get some prices on fees & give them the summary of your story, you have thirty days from the notice of audit to tell them you found errors & wish to make a disclosure. They will work with you in doing a phased payment arrangement.