VAT analysis: the risks of not analysing regularly

VAT analysis, spend analysis, VAT review, value added analysis. A much-loved child has many names. Whatever you call it, it is about reviewing closed financial years to find discrepancies and recover funds.

Not carrying out regular VAT analyses in municipalities and the public sector brings a number of risks. Here are some of them.

Overpayment or underpayment of VAT

If nobody checks the VAT on the invoices, and there are no routines for handling it correctly, the wrong amount of VAT can be paid. You then do not have full control of the flow of money either.

Incorrect VAT reporting

Without routines for checking and reporting VAT, there is a risk of submitting incorrect returns and receiving tax surcharges or fines.

Shortcomings in VAT handling

Without regular analysis it is hard to find shortcomings or problems in VAT handling. This can lead to not complying with VAT legislation and being hit by fines or sanctions.

Transparency

Without regular analysis it is hard to get a complete picture of the VAT that is charged. It then also becomes hard for the public and politicians to understand and check it.

Inefficiency

A VAT analysis often shows where the organisation can work more efficiently, for example by automating VAT handling or gathering VAT information in a common database. Without the analysis, those opportunities are hard to see.

Worse relationships with suppliers

If the VAT on invoices and other documents is not checked, problems and misunderstandings can go unnoticed. This can in turn harm the relationship with suppliers.

There are more reasons for regular VAT analyses, and more risks in not doing them. Our clients get 99% right, but the remainder becomes an opportunity for learning and improvement. You also get back funds that you are entitled to.

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