Issued a VAT invoice but the customer didn't pay the VAT

DFB-D

https://www.boards.ie/discussion/comment/120825776#Comment_120825776

Intra EU?

Is the customer not in Ireland?

There are a few circumstances where you either 0 rate the invoice (place of supply is EU), charge no VAT (place of supply outside of EU) or the purchaser does not pay VAT to the supplier VAT 56.

You should probably run it by your own accountant or tax advisor, asking these things on a forum which is answered by random people (however well meaning) is unreliable.

CramCycle

https://www.boards.ie/discussion/comment/120855925#Comment_120855925

Intra EU as that's where it shows up on VIES if you want to check easily. I thought that's what might have happened when their accountant couldn't confirm our VAT number on their system. It wasn't that anyway.

The advice here has been excellent bar one or two people misunderstanding each other and that might be as much to do with me not wanting to give too much info away in case it was possible to identify them, or them me.

DFB-D

https://www.boards.ie/discussion/comment/120855987#Comment_120855987

No offense, but "excellent" is your own opinion based on you not having the complete information regarding VAT legislation.

And you haven't given the complete information either.

And further, it doesn't sound like you have received complete/accurate information from your customer either.

I have said there are tax compliant reasons why a company may not expect to pay VAT on your invoices, I suspect you may have this issue again in the future and you haven't really dealt with it, and it seems like you are souring a potential repeat customer assuming they are trying to defraud you.

It is highly unusual for VAT numbers to be checked against VIES in domestic VAT processing and for the customers accountant to reject your invoice and to suggest to help you create a correct version, they must have had a basis for doing so.

CramCycle

https://www.boards.ie/discussion/comment/120857257#Comment_120857257

No offense, but "excellent" is your own opinion based on you not having the complete information regarding VAT legislation.

Plenty of jobs I have worked in had me looking over VAT and invoices. I done the books for my father for years without issue. It just threw me when they said it, as it just never happened before, so I thought best to check. I have dealt with RCTs etc. in other jobs so am aware of exceptions. Knowing this company and their turnover, it threw me a bit so I thought best to double check. Looking at my OP, the question was, I am pretty sure I can't do this but just checking. We are a small company starting out. I have family who are accountants but didn't want to ask them. I also could have kept digging on revenue and eventually came to the same solution. I didn't take anyone's advice as gospel and did in fact double check anything I acted upon.

I have said there are tax compliant reasons why a company may not expect to pay VAT on your invoices, I suspect you may have this issue again in the future and you haven't really dealt with it, and it seems like you are souring a potential repeat customer assuming they are trying to defraud you.

None of those reasons are applicable here, I also don't think they were trying to defraud me as they gain nothing from their actions (again, this threw me, it didn't make any sense to me). I have seen their accounts, it would cost them nothing. It would also have been insignificant in terms of their annual turnover. Their accountant appears to be a one person show, who can't seem to work SAGE. Their reasons for not paying VAT changed 3 times inside of a week. In fact they and their accountant both gave different reasons on the same day. One where they claimed it was better for me as I wouldn't have to pay the VAT to revenue.

Personally having overheard others in the area talking about them, it would very much appear to be a manoeuvre to make me feel like I owed them something. I won't go into one of the larger issues from their former company as they would be easy to identify but needless to say, I am less trusting of them, whatever their actual reasons. I am only new to the area so this was all new to me. I also would later find out that one of the people who works for them has it hidden from everyone that they work there, their reputation is so bad.

I also don't need their repeat business so no loss that way either.

It is highly unusual for VAT numbers to be checked against VIES in domestic VAT processing and for the customers accountant to reject your invoice and to suggest to help you create a correct version, they must have had a basis for doing so.

Their accountant said they couldn't confirm my company's VAT number, I had presumed maybe they just used VIES as they are a one person show. I had sent them documentation from revenue showing it and also had to tell them that if they would have to ring revenue if that wasn't enough. They replied and kept saying it wasn't confirming for them. It would later turn out that they simply didn't know how to use SAGE, which has a known issue with newly registered non intra EU Irish VAT numbers. I even found the solution, typed it out for them and sent it to them. To this I then received a different phone call from the MD (small company employee wise), explaining that they name of my business would set of a red flag with revenue and that they were just going to pay me to my personal bank account and make up an invoice for me (I don't think I went into this earlier in the thread, can't remember). I had to tell them that this wasn't appropriate for a multitude of reasons but they were very clearly trying to make it sound like a favour to me. They were not trying to help me create a correct version, they were attempting to help me commit fraud, whether intentional or not. I done this work as part of my business and they wanted to pay me directly, make up an invoice, and act to revenue as if I was a small time consultant that wasn't VAT registered. For a variety of reasons I don't want to go into, this was not acceptable to me.

Like I said, thanks everyone for all the help and concern, it is all sorted now and I am happy for the thread to close.

For those who asked earlier in the thread, I sent them a credit note for the first invoice just in case they did attempt to use it. I have left them with the second invoice. If they make up an invoice or not, I have paid the VAT into revenue, whether it is ever noticed is a completely different story. They are now aware that I won't do business with them going forward.

sydthebeat

Sounds like a horrible company to deal with.

But hey, they got away with playing 20% less on their bill because you caved.

mrslancaster

....

DFB-D

https://www.boards.ie/discussion/comment/120857475#Comment_120857475

There is no benefit to this other company (assuming they are conducting a Vatable activity, they just reclaim the VAT on the invoice).

Anyway, I actually think an awful lot of what your approach is naive, I deal with a lot of people who are adament they are capable of DIY tax, until they are proved wrong and cannot find the answer....btw I see errors and risks in the information you have given (tax and business).

But yes, let's leave it there!

mrslancaster

https://www.boards.ie/discussion/comment/120852158#Comment_120852158

OP said his client company didn't recognise the business name of the farm and only had the OP's name on their system.

...."They gave a story that they don't have our type of business as part of their suppliers list (work was consultancy, our business name is after our family home with the word farm in it). I am VAT registered but they just want to pay me the amount and not to the business. Do I report them to revenue. They asked me to reissue the invoice in my name not the business name and they just paid the amount without VAT"....

This is what I posted so the OPs business invoice would be linked to his name and recognised by the client's system and the vat would be paid:

...."Could you re-issue the invoice as Mr CramCycle t/a HouseNameFarm? "....

Afaik as an individual, his sole trader vat number is the same for the registered business name he is trading as.

Unless the OP had a separate limited company ie. the 'HouseNameFarm Ltd' and issued the original invoice in that name, in which case the client system may not have recognised it as being the OP's consultancy service. That wouldnt explain why the client wanted to pay the net only directly to the OP.

Please explain what evasion you mean or what the Revenue issue is whether the invoice is issued in the OP's individual name or in his registered business name, or from 'MrCram trading as HouseFarmName' when the vat number is the same?

CramCycle

https://www.boards.ie/discussion/comment/120857673#Comment_120857673

100%, there is no benefit to them, which is what is the weird thing. They are VAT registered and they could reclaim the VAT.

Happy for you to drop the errors by PM, I know there are technical errors with what I have done. Such as there is a value on the activity so whether they paid me or not, I should not have wiped the invoice and simply paid the VAT and sent them a follow up with a balance left. So this is technically fraud. On paper though, it ends up the same for me and revenue, with less hassle.

As for a business error, alas no, it would be an error to keep doing business with them in any way shape or form. I wish I had known their reputation before I started doing business with them. In hindsight, best I can think is that they were trying to have one over on me as I had made it clear while working there that I was getting busy so wouldn't be doing much more past that project. Most of their business is not local. Despite their substantially large profits per year, they are or were never going to give me much business, I won't gain any business of them as they were never going to recommend me to anyone else and the many people I am getting business from now would have been more hesitant to do so if I was associated with them so I am happy with my choices.

CramCycle

https://www.boards.ie/discussion/comment/120857845#Comment_120857845

You are right, my CRO registered name and VAT registration are the same XXXXXfarm Ltd.