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Are you ARTD ready?
For most business the end of the joys of the Christmas period announces the arrival of the dreaded “year-end”. Financial Statements are being prepared, audits are being carried out and finance teams are extremely busy. During the hustle and bustle of this busy period one tax return that is often overlooked is the VAT Annual Return of Trading Details (ARTD).
All VAT registered persons are required to file an ARTD following the end of their accounting period (which is usually similar to the financial year). The ARTD is a statistical return summarising actual sales and purchases figures the VAT on which was included in the less detailed periodic VAT returns falling during the accounting period. The return gathers the information through four key questions as follows:
- Have you made supplies of goods or services?
- Did you acquire any goods or services from the European Union, including Northern Ireland?
- Did you purchase goods or services for resale?
- Did you purchase goods or services that are not for resale but where VAT paid in them can be claimed as input credit?
The fields on the return are completed using the net sales or purchase figures at the various VAT rates applicable to the relevant transactions. For example the net total sales of goods and services supplied for Question 1 will be broken down into the various VAT rate categories (9%, 13.5%, 23%, etc.) and included in the return based on the total for each rate.
The ARTD must be filed on the 23rd of the month following the end of the accounting period. Therefore if you have an accounting period which ends on the 31st of December 2017 your ARTD is due to be filled by the 23rd of January 2018. The Return is, as mentioned, a statistics return, and as such does not of itself carry an obligation to pay any VAT liability. However, The RTD is essentially an audit tool to assist Revenue in verifying the accuracy of your periodic VAT returns filled during the accounting period. Revenue have further emphasised this point in recent guidance by stating that when a Nil RTD is filled it will be rejected when there have been positive values in the VAT returns for the accounting period.
It is important therefore to ensure that your ARTD reconciles with the VAT payments made to Revenue in the period which it covers. We would recommend that a reconciliation of the ARTD with the VAT returns is carried out because it is quite likely that one will be carried out by Revenue and if there are discrepancies Revenue may choose to audit your business,
In contrast to VAT returns, there is no option to complete a ROS Offline file in respect of the ARTD and the return must be completed ‘live’ on ROS.
Failure to file an ARTD can affect the cash flow of your business as future tax refunds, under any tax head, can be withheld until the ARTD has been filled.
In order to aid you in completing periodic ARTDs and to ensure that the information provided to Irish Revenue is correct, it is recommendable that your tax and VAT codes within your ERP system take account of the data required to be declared in ARTDs. In addition preparing the ARTD on a periodic basis when you are preparing your periodic VAT return will alleviate pressure during the “year-end” process.
Despite an overhaul in recent years, the ARTD still contains obvious flaws and its completion, in parts, is certainly open to interpretation by the taxpayer. Furthermore, in the absence of definitive guidance from Revenue, it is not surprising this is a return which taxpayers often have difficulty completing.
So are you ARTD ready?
Should you have any queries on this article’s contents or would like our assistance with preparation of your ARTD, please contact Christopher Connolly or your usual VAT contact.