April 18, 2019
The VAT RTD return provides an annual summary of the VAT returns filed for the year end is due by the 23rd day of the month following the period end, e.g. the RTD (Return of Trading Details) return for the period ended 31 December 2018 is due by 23 January 2019.
We at, John M Shanahan & Co, Chartered Accountants, Tullamore, Co Offaly have taken a look at how Revenue are using this Form to delay refunds to taxpayers and companies and force compliance.
Regulation 24(1) of the Value-Added Tax Regulations 2010 (S.I. No. 639 of 2010) requires all VAT registered traders to submit a VAT Return of Trading Details (RTD) on an annual basis, following the end of the respective accounting period.
In the case of companies registered for corporation tax, an annual VAT return will be required for the 12 month period based on the company’s accounting period for corporation tax. The annual return is due to be filed within 23 days of the year end.
The RTD is a summary of supplies of goods and services, imports and purchases giving rise to deductible input VAT at the various VAT rates. The return includes all Irish, intra-EU and overseas trade carried out by the Irish business. The VAT exclusive value of the supply of goods and services should be included. All turnover, including turnover at exempt rates and at the zero rate must be included on the form.
Failure to file may result in increase in Relevant Contracts Tax (“RCT”) rate applicable to sub-contractors and denial of tax clearance certificate
As notified by Revenue in e-Brief No. 51/14, when a business files a claim for a repayment or refund of tax under any tax head and there is an outstanding VAT RTD with a due date within the previous 12 months, then that repayment or refund will be automatically withheld. To date, the Revenue have delayed refunds of tax in this regard, but a failure to file a RTD was unlikely to have had any further impact.
However the Revenue have recently confirmed that they intend to increase the RCT rate applicable to sub-contractors who have not filed their RTD and they will also deny tax clearance in such cases. The increase in the RCT applicable to sub-contractors would have a detrimental effect on cash-flow if 20% or 35% of the gross payment to be made was withheld.
So, make sure your RTD is completely accurate and filed on time. There is a penalty of €1,520 for failing to comply.
We at JOHN M. SHANAHAN & CO. are here to help you with all your accounting, business, financial and taxation requirements, by providing expert, specialist and professional service tailored to meet your needs.