VAT resource, experience and training

Level of VAT experience held by those responsible for this tax

  • Staff involved in VAT compliance appear to rely on their resources to keep up-to-date, with 46% relying on ‘external seminars/events’ and 58% saying they are ‘qualified by experience’
  • Within large organisations, almost a third (32%) have a formal tax qualification but again employers provide little support – 22% receive ‘ongoing internal training’ and just 15% attend ‘annual or quarterly external training’
  • Even fewer SMEs invest in VAT training with only 11% receiving any ‘ongoing internal training’ and just 4% attending ‘annual/quarterly external training’. Only 11% have a ‘professional tax qualification’.
Role/title of those preparing the VAT return

  • It is not surprising that the larger a business is the more capable it is of having someone with a dedicated role to complete specialised tasks, such as VAT compliance. Although in Europe, few staff responsible for VAT hold tax qualifications – instead they rely on informal training and ad-hoc experience to navigate VAT compliance. This is a common theme for both small and large businesses
  • Large UK businesses are more likely to have VAT managers than any other European country. This might perhaps be because many global businesses are headquartered in the UK and, as a consequence, the need and skillset for a dedicated VAT manager (most likely responsible for European/Global VAT matters) has developed in the UK more than in other countries.
Who reviews the VAT return prior to submission?

  • Throughout Europe a large proportion (77%) of organisations admitted to no independent review of the VAT return before submission to the tax authorities
  • Italy showed very admirable behaviour with less than 5% of small businesses not reviewing their VAT return prior to submission and all large business respondents said their VAT returns were reviewed before submission
  • In the UK, penalties for VAT errors are based on whether or not a taxpayer has taken ‘reasonable care’. It is therefore surprising that 15% of UK respondents (typically SMEs but notably also a FTSE 250 company) state that the return is prepared by a staff member with no VAT/tax qualification or expertise and is then submitted to HMRC with no review. It is important to ensure that there is a robust independent review of a VAT return by someone other than the preparer to limit the risk of such penalties arising if VAT errors are made
  • UK businesses are more likely than EU businesses to have designated in-house VAT managers and/or staff with responsibility for VAT who hold a tax specific qualification.
How effective are company VAT systems and processes?

  • A third or more of respondents from all countries had concerns that their VAT systems and processes were not as effective as they could be
  • The UK results are slightly more negative than most and significantly worse than respondents from Germany and Spain who displayed the most confidence in the review tools they had been given to manage VAT
  • A handful of very large UK businesses respondents have concerns that their VAT systems and processes are not effective.