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Attention all business owners, Revenue want to see your Trade Creditors Listing

Wednesday, 17th January, 2018

In Budget 2014, Revenue was given the power to request a copy of your Trade Creditors Listing in order to review it for trade creditors that have been unpaid for 6 months. The purpose of this was to help Revenue identify the VAT on those trade creditor balances and to seek repayment of the same.

Now, in 2018, Revenue has decided to exercise this power and are reaping the rewards.

Our advice: Stay ahead, be proactive! Review your Trade Creditors Listing to ensure that you save on tax and ensure that your hard-earned cash stays in your business.

For more information on the 6 month VAT rule, please continue reading below.

If you need advice on Trade Creditor Listings, VAT or cash flow management, please contact your usual DBASS advisor or ask to speak to Sean O’Reilly on 01 849 8800.

DBASS provide a full range of services and can assist you with all your business needs. We are passionate about your business. Contact us today. We are here to support you and your business to achieve growth and success.

 

Adjustment of VAT Deductible where Consideration is Unpaid after 6 months

Where an Accountable person, who has made a deduction of VAT in a taxable period, has not paid the supplier for the related goods or services within 6 months of the end of that taxable period, then the Accountable person must make an adjustment to the amount of VAT deductible.

The adjustment to the amount of VAT deductible must be made in the 3rd taxable period following the period in which the tax was deducted.

This treatment applies to all purchases made on or after 1st January 2014, thus the first return in which an Accountable person can make any necessary adjustment is the July/August 2014 VAT Return.

Where an adjustment is made and the Accountable person then subsequently pays the supplier for the related goods or services in full or in part, a corresponding re-adjustment is permitted to be made.

The re-adjustment to the amount of VAT deductible must be made in the taxable period in which the full or partial consideration was paid.

Circumstances when an Accountable person does not have to make an Adjustment to VAT deductible

There are two circumstances:

  1. The credit terms agreed between the parties for genuine commercial reasons exceed 6 months and the transaction is an arm’s length transaction.
  2. There is a genuine dispute between the Accountable person and the supplier which is still to be resolved.

Where either of the above circumstances applies, the Accountable person must:

Disclose to the Revenue Commissioners the full facts and circumstances about the non-adjustment. The disclosure must be made on or before the due date for the submission of the return in which the adjustment would be required.

The Revenue Commissioners will then assess the disclosure and determine whether the reasons for the non-adjustment by the Accountable person are acceptable.

Consequences where a non-adjustment has not been approved and the Accountable person does not make the adjustment

  • The Revenue Commissioners will ensure that the VAT is adjusted.
  • Interest will be calculated back to the period when the adjustment should have been made.
  • Tax geared interest/penalties for an incorrect return are levied where appropriate.

 

For more information, please click here and refer to Page 103.

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