Growth increases transaction volume, but it also increases the number of places where VAT treatment can go wrong. Strong controls help a business maintain consistent reporting as its customers, suppliers and service lines expand.
1. Inconsistent tax coding
Similar transactions should receive consistent treatment. A documented coding guide and periodic review reduce the risk of different team members applying different VAT codes to the same type of supply.
2. Weak supporting documentation
Invoices, contracts and evidence supporting the nature of a transaction should be complete and easy to retrieve. Missing documents can make otherwise reasonable positions difficult to demonstrate.
3. Unreviewed customer and supplier data
Incorrect registration details, addresses or entity names can flow into invoices and reports. Master-data checks should be part of onboarding and recurring account maintenance.
4. Manual adjustments without approval
Adjustments need a clear reason, supporting evidence and an appropriate reviewer. A simple approval workflow makes the VAT return easier to reconcile and explain.
5. No reconciliation to the general ledger
The VAT return should reconcile to the accounting records. Differences should be investigated and documented before submission rather than carried forward without explanation.
This article provides general information and is not a substitute for advice based on your specific circumstances.
