Our interrogation tool could save you VAT, and a grilling from HMRC.

Indirect tax often represents one of the largest throughputs in a business. Despite this, research has revealed that only a minority of organisations have specific VAT performance goals, that there is minimal internal knowledge of UK and global VAT throughput within many organisations and that documented processes are limited.

As a result, many businesses are failing to identify areas of opportunity and risk with their VAT accounting and compliance, both in-territory and cross-border.

Baker Tilly can assist you in enhancing the bottom line of your business in the following ways:

Improving cashflow and identifying outright cash saving opportunities

Using our technical expertise in conjunction with our electronic interrogation tool, we offer a systematic, technology-based review to maximise recovery of VAT and mitigate inaccurate or inappropriate VAT costs.

In our experience, VAT accruals undertaken are often no more than a ‘token’ attempt to capture late invoices. By analysing thousands of lines of data, quickly and efficiently, we can identify and calculate an accurate VAT accrual which could increase VAT recovery on a current return, and result in a permanent injection of cashflow by as much as 30%.

Our interrogation tool has the ability to sort, sample, cross refer and analyse large amounts of information. We are able to quickly identify VAT over payments and under recoveries, potential claims for overseas VAT and numerous other opportunities to improve cashflow and identify outright cash savings.

Improving processes and reducing costs

VAT accounting covers the entire end to end process from initial data input into accounting systems to arriving at the numbers which form the basis of the VAT return (i.e. both inputs and outputs).

By process-mapping systems and controls (including compilation and completion of the VAT return), we can identify critical paths, good practice and any control weaknesses. Using our sophisticated data interrogation software, we can then drill down into specific areas to provide reassurance and comfort on the robustness of the data and identify any opportunities to reduce inefficiencies.

Where any weak controls are identified, we can develop an action plan with you to identify steps to tighten controls, provide a formal report, or incorporate our findings into the production of VAT manuals for use by accounts staff.

Managing VAT risk to give comfort and confidence in the accuracy and reliability of your data

It can be seen every day that HM Revenue & Customs is increasingly focusing its resource towards the management of tax, and in particular VAT, by larger businesses through its Client Relationship Manager programme or through targeted risk analysis.

In recognising that the management, and demonstrating the management of VAT as a key priority for clients, Baker Tilly offers a systematic, process driven and technology based review of systems.

Combining our technical expertise and electronic interrogation tool Baker Tilly are able to:

• Identify VAT risks both in-territory and cross border;
• Assist Senior Accounting Officers (SAO) and tax managers by providing comfort on the risk areas;
• Enable SAO’s to fulfil the legislative requirement that the company’s tax arrangements are fit for purpose;
• Demonstrate to HMRC that proactive steps are being taken to ensure that VAT accounting arrangements are robust and that the organisation has exercised due care in its VAT accounting.

To find out more details about this issue, please contact your usual Baker Tilly contact.