How to comply with the revised VAT Return of Trader Details filing system

Back in July 2013, Revenue issued a number of eBriefs (eBrief 31/13 and eBrief 49/13) to advise VAT-registered traders of a substantial redevelopment of the current VAT Return of Trader Details (RTD) filing system. In Summary, every VAT registered entity must now complete and file this document. If not, you will not receive VAT and other tax refunds and it may hold up the issue of tax clearance certificates.

The Revenue advised that this new RTD system would be delivered over a number of stages between late-2013 and early-2014.

The first 2 stages were the redevelopment of the RTD form. The goal was to simplify the format of the return. It is also now mandatory to file the improved RTD format in Revenue’s Online System (ROS). There a small number of exempted cases who are still permitted to file paper-based RTD.

New VAT RTD Compliance Measures

With Stages 1 and 2 now completed, Revenue has issued a further eBrief (eBrief 51/14) to remind VAT-registered traders of their statutory obligations and the introduction of the following compliance measures:

• When a customer files a claim for repayment/refund of credit under any tax-head and there is an outstanding VAT RTD for the previous year, then that repayment/refund will be withheld. For example: If the current year is 2014 and a VAT refund claim is submitted which relates to a 2012 VAT period, Revenue will consider the previous year to be 2013. If the VAT RTD for 2013 is outstanding, then the refund amount will be withheld until the 2013 VAT RTD is filed;
• The outstanding VAT RTD and any other outstanding returns will be notified to the customer in a 'Notice of Returns Outstanding' letter issued by Collector-General;
• The repayment/refund will issue upon receipt of the outstanding VAT RTD and any other outstanding returns.

A Quick Checklist

To help you comply with the revised VAT RTD filing system, here is a quick checklist:

• If you are a VAT-registered trader, you are required to complete and send to Revenue an annual Return of Trader Details (VAT RTD). Check your filing deadline with your accountant;
• Mandatory e-filing using Revenue Online System (ROS) applies to all VAT-registered traders with the exception of a small number of exempted cases who are permitted to use paper-based filing. Therefore, if you currently use ROS to file your returns you must continue to do so to make the RTD return;
• The return form provides fields for a breakdown of supply of goods and services, imports and deductible inputs at the various VAT rates applicable during the year. It also includes all Irish, Intra-EU and non-EU trade. Ensure that you fill in all fields even when ‘nil’ applies;
• If you make an accidental error or omission after a VAT RTD has been filed, you should notify Revenue at cgsustserv@revenue.ie and provide details of the return in question and what needs to be changed. This applies to both online and paper returns.

Make your life easy and automate the return using your bookkeeping software

Ensure your bookkeeping software is configured correctly to assist you with the preparation and submission of the RTD. From experience, the completion of the RTD return is one of the most painstaking tax returns to prepare and accurately calculate. It is also one of the most confusing, even with the improvements made online. The good news is any decent and “up to date” bookkeeping software is capable of spitting out a VAT report with all of the necessary information needed to simply fill in boxes on ROS. The latest versions of Sage even produce the RTD return in a ROS file format that can be uploaded directly into ROS.

Remember the RTD data produced from any accountancy system is only as accurate as the way it is inputted into the system. You must check that you are using the full range of VAT codes. You must split purchases between “items for resale” and “items not for resale. You must watch out for Intra-EU VAT transactions and account for these in the correct manner. "Quick Tip – The majority of Intra-Eu purchases are Standard Rated Purchases from the EU. They are not Zero rated purchases from the EU or anywhere else.”

If you do not post entries to the correct VAT codes then you will not be able to produce the RTD return. Please make your life easy and review the VAT codes on your system and ensure that you are using the correct codes.

We stress that it is important to accurately complete this return. Revenue are using computer systems (REAP) to analyse the information extracted from this return and compare it to the VAT3 returns filed in the period vs. the Corporation Tax return vs. VIES returns. If returns are not matching up it increases the likely hood of receiving a Revenue compliance check letter and/or a full Revenue Audit.

We recommend that you take the time to read carefully the eBriefs referred to in this article and take necessary steps to ensure that you file and return your VAT RTD correctly and on-time. By doing so, you will avoid any repayments or refunds of tax being withheld. 

VAT Advice

If you should have any questions about the introduction of these automated compliance measures for VAT Return of Trader Details, contact your usual DBASS advisor or call 01 849 8800 and ask to speak to a specialist VAT advisor.

Image supplied "Tax Return Papers" by Grant Cochrane courtsey of FreeDigitalPhotos.net