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Help!! Think I might be in trouble with VAT

  • 04-01-2022 4:20pm
    #1
    kdowling
    Registered Users, Registered Users 2 Posts: 375 ✭✭


    My accountant is not back until Monday so I’m hoping someone here can help me in the meantime!

    i have a small company that I run on the side of my employment.

    its a e-commerce store selling physical product.

    I hit €50,000 sales in 2020 and €70,000 sales in 2021.

    I thought that as I didn’t hit over €75000 in sales in any calendar year that I didn’t have to register for VAT.

    i read today that it doesn’t have to be a calendar year but any successive 12 months.

    mist of my sales were second half of 2020 to first half of 2021 where I went well over €75000 for those 12 months.


    does that mean I have a tax bill plus penalties to pay?

    what's the best way to resolve this?


    thanks in advance, I’m very stressed about this so any advice would be greatly appreciated



Comments

  • #2
    ari101
    Registered Users, Registered Users 2 Posts: 2,835 ✭✭✭ari101


    Register now and start charging/claiming VAT if you expect the increased sales to continue, don't worry about last year.

    While Revenue can inspect your books, and could challenge a belief that you did not expect to exceed 75k in a continuous 12 month period, I imagine there is a reasonable argument that sales growth was unpredictable... At end 2021 when finalising updated budgets the expectation was revised, turnover would likely now remain at an increased level such that it would exceed 75k pa. going forward (after accounting for investment in stock), and as such you registered ...?

    Realistically Revenue just don't have the resources to apply the level of scrutiny needed to this kind of situation, that is arguably judgemental, and, for Revenue, a small amount of money. While no one can predict for sure, as long as you get registered soon, I would be surprised if they batted an eyelid.



  • #3
    PlanBee
    Registered Users, Registered Users 2 Posts: 27 ✭PlanBee


    VAT registration is mandatory if you meet any of the following criteria: Selling over €37,500 for the sale of services or €75,000 for the sale of goods means your company needs to register for VAT in Ireland. This is a sale threshold amount over the course of 12 months (not calendar year).

    (not calendar year)

    You can calculate sales monthly and this gives you flexibility to show that you did not hit it over €75000



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