Are you confident that your business is on top of the potential VAT risks it faces?
The tax world is changing now more than it ever has done; VAT rates in the EU are increasing, income tax rates are shifting and there are plans afoot to further centralise EU taxes.
It can be hard to keep up to date with new rules and regulations and ensure new VAT requirements are implemented correctly and on time. Introducing new products and services, and moving into new international markets are changes that can expose a business to new VAT risks. Business reorganisations and staff turnover are all factors that can result in expertise being lost and additional training being required.
Concerns over the tax gap have led to HMRC applying the VAT penalty regime more rigidly which means VAT errors made are likely to prove more costly now. Ensuring staff are adequately trained to perform their roles accurately, identify potential VAT opportunities and recognise VAT shortcomings is key to avoid falling into VAT traps and incurring unnecessary interest and VAT penalty charges.
This has never been more pertinent than now with increased emphasis and focus placed on large businesses falling under the Senior Accounting Officer (SAO) regulations. For example, there is a personal fine levied against the SAO of £5,000 per failure to adhere to the guidelines set out by HMRC. More than ever before it has become very important to recognise that creating an environment where the people making the embedded tax/VAT decisions are supported and given the tools needed to their job effectively.
Moreover, in today’s business environment it isn’t enough to say “we have a tax or VAT manager who deals with that…” – in modern business the VAT process goes deeper into the business and tax authorities are now expecting that to be recognised.
Consequently, we are starting to see a shift in thinking by large businesses in reaction to the SAO regulations – the growing consensus is to move towards online knowledge solutions, especially in troublesome areas such as VAT (see our earlier VAT blog on Why an SAO Strategy is Vital)
At the heart of an effective best practice strategy is online training which is documented, standardised and robust. Online training and resources are scalable across large organisations, easily made widely accessible to all staff – new and existing – and any improvements in staff output are measurable.
A best practice strategy will in turn bring about well-trained people, making better and more informed decisions. With access to the essential VAT information and knowledge tools, staff can deal with the day to day issues that otherwise might slow down the business process.
Access to even basic knowledge tools will bring about a resolution to many issues thought to be ‘real’ – that is, by being able to learn more about VAT it will help to answer many of those simple questions that are ‘knowledge gap’ issues and then allow the business to focus on those areas that are the ‘real’ issues in play.
To assess potential VAT knowledge gaps in your business, you can use our free tool here.