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Vat Inspection of Cloud Software

Client uses Xero + Receipt Bank

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I have a client who to get a routine VAT visit in Janaury (just what I need). I have not dealt with an isnprection like this for a while. The last one I did was fully paperless so I exported all the reports into Spreadsheets for them to view.

However they wouldnt use my IT and only had a note book, no laptop of her own.

So she picked a few large bills and asked me to print them off.

If they want to view expenses invoices are you expected to print them all off?

Its great that we are expected to move forward with MTD yet HMRC wont use IT in case they break it.

 

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18th Dec 2018 14:36

It makes you wonder why they wanted MTD in the first place.

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to lionofludesch
18th Dec 2018 16:21

Its going to be fun.

I set them up a stand alone laptop to view everything they needed and would not use it in case something went wrong and I could claim against them

Seems ridiculous, when they beat everyone into compliance yet are 10 years behind themselves

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By Tornado
18th Dec 2018 16:35

Please tell us how you get on.

With none of my client's having a VAT inspection for several years, I would imagine that VAT Inspectors of today need to be pretty competent with VAT law and accounting software otherwise they are going to look pretty foolish.

Could be fun.

Thanks (1)
to Tornado
18th Dec 2018 17:08

I am not sure if they do get trained in Xero etc these days the problem seems to be more of a legal one.

If they were using your laptop and the software crashed etc or caused data loss then they would be responsible for wrecking your finance records, so they wont touch it.

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18th Dec 2018 16:41

I always refuse point blank to let them book them, and deal with it all remotely.

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By Tornado
to ireallyshouldknowthisbut
18th Dec 2018 20:56

'and deal with it all remotely.'

Good Idea. Majorca it is then.

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19th Dec 2018 08:42

Last inspection I had, I just printed out the transaction list per vat quarter, so they could see all the numbers that comprised the figures on the VAT return. Inspector went through the list and asked me to show her certain items, which I brought up on screen on my laptop for her to view. She then marked off about 30 items on my paper list for which she wanted me to send her copies of the underlying purchase or sales invoices. After she left, I downloaded pdf copies of those 30 and emailed them to her. Simple!

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19th Dec 2018 09:34

In the old days, when one client or other had a VAT inspection and I was using Sage Line 50. I would do as Charlie Carne says he does now, so the only difference for Xero would be having to print out any invoices they wanted to see. Most of my clients don't upload invoices, however.

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By RedFive
20th Dec 2018 09:11

I had one in January this year on a client using QuickBooks Online.

Started with a pre visit questionnaire sent to client. Would be easy to trip up on some of the questions so majority completed by me. Nothing to be concerned about though unless you get to Q34, are you aware of any errors and you answer yes :-O

Then visit by two (very polite) officers at clients premises (golf pro shop) at pre arranged time.

Client instructed to say nothing and I led the meeting. Very straightforward they had an agenda though insisted was a 'random' inspection.

Wanted to see a couple of different quarter ends going back 3 years. Pulled off the detailed transaction report from QBO, showed them on screen (as said, like being in Blue Velvet they can look but strictly no touching) and they then asked for a couple of hard copy invoices for the larger purchases.

They then went through the reports looking for vat that shouldn't be claimed, easy to see on the detailed QB report as you can sort on screen by date or supplier or vat code used.

Unfortunately they found a few Google ads payments where my guy had claimed vat on way back when with a very poor local competitor Acc to me :-)

No dramas, they found what they were looking for, went away then sent the determination with penalty successfully suspended by yours truly as argued better Accountant and systems now, and could show Google ads were going through 0% EC Services code so had been correct for last 12 months.

They gave a bit of advice around the very small amount of sales he uses the margin scheme for and looked clueless when I pressed them on MTDforVAT.

Hope that helps.

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By Tornado
to RedFive
20th Dec 2018 10:00

Thank you for this visit description.

A perfectly logical approach . The key factor is that the inspectors do not touch the computer and just examine the records.

A bit like inspecting manual records really.

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