Many years ago, one of our customers (a glass factory) depended on just one man for the entire planning of the plant. He had built his own planning model, which was actually quite good. One day he was summarily dismissed for fraud. No one else understood the model he had created. It took the plant many months to recover. Surely, they kept on producing but they lost a lot of money along the way. It is a true story; they even asked us for help.
Unexpected events
This story came to mind, while contemplating how the coronavirus crisis might affect businesses. After all, corona is an unexpected event too. What to consider? What are the risks involved? Will there be any new quick fixes? And so on. When relating this personal story to the VAT declaration process and VAT compliance there are similarities in the way many finance departments rely on their self-created solutions to determine and report VAT. In many cases they rely on the one man or woman who understands how to generate the figures, often using complex Excel functionalities.
More at ease
Usually the same person is responsible for adopting and integrating new VAT regulations. But what if that person becomes ill and is unavailable for a longer period? Even though there may be people who understand the underlying calculations this doesn’t automatically imply that they are capable of incorporating new VAT rules. At 4apps we have noticed that organisations that use standard VAT software with proper functional support by the software supplier are a lot more at ease. That only makes sense since any financial expert can do the VAT declarations (online) while relying on the supplier to include the new regulations.
Contingency plan for VAT declaration
The main question therefore is: ‘Does your company have a contingency plan for VAT reporting in case of unexpected events and absence? Is your method or procedure documented? Have you taken other measures? At the end of the day you simply cannot escape from the need to report the right VAT figures in time. Please let us have your feedback on this matter so we can include your contributions and recommendations in a next blog for others to profit from.
Latest developments UK and Poland
Last but not least we would like to draw your attention to two important topics when doing business in the UK and Poland. Firstly, the UK HMRC will start fining all companies that do not send in their VAT declaration using MTD regulations as from April 1st. As nothing is certain these days we strongly advise you to check the following website on a regular basis: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses.
Secondly, in Poland, the implementation of JPK_V7M and JPK_V7K structures has been delayed until July 1st.
Feel free to share your experience with contingency or contact us about the content of the blog: h.tiesma@4apps.com or l.voogt@4apps.com.
Latest news related to this blog: UK HMRC has issued this statement about a change in the MTD deadlines:
COVID-19 is creating extremely difficult times for all, and we are committed to helping in every way possible all those businesses facing unprecedented challenges.
Therefore, we are providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.
If you have questions or want to know more about our standard VAT software, feel free to contact us.
