Our outsourced VAT and customs duty compliance solutions offer clear benefits to organisations:
- Additional support in an area where the impact on internal resource can be significant
- Reassurance that the solution is managed by specialists in the relevant area.
Our specific offerings are listed below and we are also able to create bespoke solutions to address a particular area of risk you may have identified in your business:
- VAT registration and the completion of VAT returns (UK and overseas) and EC Sales Lists
- Obtaining and managing Proof of Export documentation to support VAT zero rating
- VAT distance selling and e-tailing – creating and managing an appropriate infrastructure
- VAT exception testing – periodic credibility checks transactions that present VAT risk
- Managing customs duty reliefs such as IPR, Temporary Admission
- Completion of import and removal entries
- Origin management
Our VAT and customs duty compliance services are managed via a secure internet portal giving you anytime access to relevant documentation.
Managing the entire process for you
Creating an appropriate VAT infrastructure can be a time consuming exercise due to the need to liaise with overseas tax authorities and provide a variety of different documents depending on the country in question and the reason for the VAT registration.
Once the registration is in place, there is a requirement to file regular VAT returns, the frequency of which depends on the country in question (e.g. monthly, bi-monthly or quarterly, with some countries also requiring an annual declaration). EC Sales Lists must also be completed for sales of goods and services.
Our outsourced solution manages the entire process for you, minimising the number of times we need to contact you to request information and obtain signatures. In addition to this our VAT return and EC Sales List completion process incorporates a range of relevant VAT credibility checks on your transactions each period to ensure there is a robust risk management framework in place.
Providing the requisite documentation for VAT zero rating
Businesses can VAT zero rate a wide range of transactions involving the removal of goods from the UK/country of shipment. However to do this, the business must be able to prove that the goods have left the country. This is in the form of official or commercial documentation and will typically include the goods departed message from CHIEF, bills of lading, airway bill, and copies of customer address labels for low value postal exports.
Obtaining proof of export can be onerous in practice, even where the transaction is a direct export and the business arranges the shipping itself. This is due to the need to obtain copies of the relevant documentation from the 3rd party freight forwarder and match this with zero rated VAT invoices. This process is made more complex where the transaction is an indirect export (eg with EX works Incoterms), as the business needs to contact the customer’s freight forwarder to obtain the documentation.
We have an outsourced solution to manage the VAT risk associated with this area. Key
benefits are as follows:
Our solution includes:
- All liaison with UK and overseas freight forwarders to obtain requisite documentation
- Creation of audit trail to link documentation to zero rated transactions on systems
- Secure intranet site to store all documentation allowing you anytime access
- Support in providing requisite documentation during audits.
Reducing the burden
The continuing increase in consumers purchasing goods online, coupled with the easy access to a global marketplace facilitated by a number of major established e-tailers, brings with it a significant VAT compliance burden.
EU businesses selling goods online (or by mail order) to private individuals in other Member States are required to charge the rate of VAT applying in their own country UNTIL certain sales thresholds are breached in individual Member States (approx. Euros 100k or Euros 35k depending on the country). At this point they are required to VAT register in the country in question and charge the local rate of VAT.
Two key considerations arise at this point:
- the impact of the new VAT rate on profitability;
- the cost of VAT compliance (VAT registration and the filing of ongoing VAT returns).
Businesses selling into the EU marketplace face a number of issues which should be considered, ideally before the thresholds are breached, so that an appropriate strategy can be determined:
For sales to non EU customers the VAT and customs duty issues are different in that there is no overseas VAT registration requirement provided the customer acts as the importer of the goods in their country. However the key consideration here is how much information you provide the customer with in terms of the final cost to them of their purchase, once they have paid any import VAT and customs duty locally.
The EU tax authorities have been very active and successful in identifying and pursuing vendors who have not registered and significant VAT penalties are being imposed. The VAT Consultancy has a low cost outsourced VAT compliance solution to assist with the above in helping you put the requisite infrastructure in place (including advising on the non-VAT elements), and managing the process going forward.
A robust means of managing your VAT risk
Many businesses recognise that their VAT return completion process does not include sufficient credibility checks or exception tests to ensure they manage risk adequately.
We offer a tailored solution in designing bespoke VAT credibility and exception checks for your business. We run these each month against AP and AR data and come on site to perform the appropriate checks against source documentation to determine whether there is an issue that needs to be escalated. We also monitor the escalation process until resolved.
For large corporates our solution provides you with the certainty that credibility checks are being carried out by senior VAT specialists without impacting significantly on existing in-house VAT resource.
For businesses without specialist in-house VAT resource, our solution ensures your VAT risk is managed appropriately.
End to end support
Businesses can significantly reduce the cost of customs duty by operating appropriate customs duty reliefs. However, the controls required to manage these effectively are significant, both in terms of the documentation required to support the returns and also the complexity of some of the reliefs. In some cases this burden is deemed too great and the business therefore is unable to take advantage of the reliefs available.
We offer a fully outsourced service to manage compliance for a number of reliefs including Inward Processing Relief (IPR) and Temporary Admission. This involves the completion of periodic returns and the management of all requisite supporting documentation on a secure intranet site which you have full access to. Our process also incorporates relevant risk management checks on specific areas.
Our clients include some of the world’s largest scheduled airlines and associated support industries.
A cost effective service delivered by highly experienced specialists
Many businesses outsource the creation of import and removal entries to their freight forwarder. We offer a similar service, BUT using experienced customs duty specialists to ensure a greater understanding of the associated risk and therefore a higher degree of accuracy and duty risk management.
In traditional models charges for such compliance can often be obscured by other charges e.g. shipping costs, but our service offers you full transparency and a fixed monthly fee rather than a fee per entry/number of lines making it more cost effective.
A robust process to minimise cost and manage risk
The origin of a product partly dictates the amount of customs duty ultimately payable upon import. It is therefore essential that the requisite processes are in place to manage this area effectively to avoid errors and unnecessary customs duty costs.
Goods originating in certain locations are eligible for preferential rates of customs duty provided the business holds the appropriate documentation to support the origin. This is an important area for suppliers who should provide the relevant documentation to customers, and also to businesses importing goods from overseas who need the documentation to support any preferential rates of duty applied.
Our outsourced offering manages this process for you, from providing specialist advice on the appropriate origin of a product all the way through to logging the appropriate proof of origin in a secure Intranet site to which you have full access.