Using an Agent to Help with VAT and Excise Arrangements

Many smaller businesses in particular hand the maintenance of their VAT and excise duty payments to a third party agent. As with outsourcing your bookkeeping and other business services, using an agent to manage your VAT and excise systems and payments can free you to focus on other elements of your enterprise.

Agents that can deal with VAT and excise must always be approached just like any other service you would buy for your business. Because of the penalties attached to the none payment of VAT and excise can be severe, choosing a reputable agent to act on your business’s behalf is crucial. Once you have located a agent to work with, their insight and skills can become a great asset your business can draw upon.

Agents and Authorisation

Appointing an agent to help you manage your VAT and excise payments will initially mean checking the credentials of the organisation you would like to use. Use the checklist below to help you choose the right agent for your business:

• Has the agent been fully approved by the HMRC (HM Revenue & Customs) to use the SIVA (Simplified Import VAT Accounting) system?
• Does the agent have many other clients they are also handling? You may want to limit the number of clients your agents handles to ensure a good level of service to your business.
• Can your agent provide a client list you can contact for recommendations?
• VAT fraud can be very serious for smaller enterprises. Ensure you have a clear understanding of the anti-fraud systems the agent has in place.
• If your business will be dealing with none EU countries, has the agent got experience of the excise regimes in these territories?

Agents and FraudThe SIVA system in particular has become the focus of fraudsters over the last few years as it can be open to abuse if your business isn’t fully aware of the integrity of all parties involved in the system. Agents that supply support using the SIVA system will also want to check that your business is legitimate as often, SIVA agents are the target of fraud by bogus companies.

Under HMRC rules both your business and your agent are liable for any VAT or excise duty that is due. Agents therefore, can easily be duped by illegitimate companies that are using the agent to bring goods into the UK with no intention of paying the taxes that are due. Be prepared, therefore, to offer details about your business to a agent you are thinking of applying to use. This is normal business practice and should not be seen as the agent looking at your business suspiciously. Just as you would check the credit status of a new business you are dealing with, your VAT and excise agent will make their own checks on your enterprise.

REDS and Duty Agents

You should also be aware of an additional scheme that could impact on your business’s use of VAT and excise agents. REDS (Registered Excise Dealers and Shippers) are approved agents and traders that can handle goods being bought into the UK from other EU Member States. Your business can use a REDS agent to handle your overseas activity. More details about the REDS system and how you can use these agents within your business is in notice 203 on the HMRC website.

Using agents to handle your business’s VAT and excise duty affairs must be approached with all the due diligence you would use when appointing any business to speak on your enterprises behalf. It is important to always have accurate VAT and excise accounts. Take your time to locate and assess an agents ability before you formally appoint them to speak for your business.

Ultimately, your business is liable for any VAT or excise that is due not your agent. As with any consultants or services you buy or hire for your business, you must have management and evaluation systems in place to ensure your enterprise always receives a high level of service and that your VAT or excise account is managed to the satisfaction of the HMRC.