OUR CLIENT EXPEREINCES : VAT FILING? OH, I DIDN’T KNOW!

OUR CLIENT EXPEREINCES : VAT FILING? OH, I DIDN’T KNOW!
June 17, 2016 accounthubng

Our client, an oil servicing firm is a supplier of services to 2 Oil majors. Their contracts last for several months and invoicing is done at the end of major milestones. The Oil majors deduct VAT from the client invoices before paying the Net figures. The client was happy at his VAT-compliance state. He didn’t have to worry as the Oil major were doing his remittance. Unknown to him, taxpayers have a dual role on every tax type. Unknown to him, he was incurring a monthly liability of 5k. The FIRS visited and computed some penalty for the business.

 

HOW COULD HE PREVENT THIS FROM RECURRING?

 

The business owner signed up for free consultation on the Accountinghub website. He sought to understand what wrong he had done, afterall, all his VAT was being remitted by the Oil majors for whom he worked. For every tax, the tax payer has a dual duty, file and remit. To file, means to fill out the necessary forms and/or provide accompanying schedule(s). Even though the Oil major were remitting his taxes, the filing part of the duty was undone. Whether or not a business makes any sale in a particular month, VAT must be filed by the 21st of the following month. NIL returns are filed when no revenue is made. The 5k penalty applies for each month of default.

 

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