Is your VAT service provider failing you? Maybe they’re missing deadlines, ignoring your messages or worse, on the brink of bankruptcy. Late VAT returns and poor communication aren’t just frustrating. They have the potential to snowball into penalties, audits and even a two-year ban from business-critical schemes like Import One Stop Shop.
Any disruption in your VAT services is stressful, so switching agents might be the best course of action. But, just like most things tax, switching isn’t always simple.
Knowledge is power though, so we’ve created this guide to help you get your VAT back in your control.
There will be warning signs that it’s time to switch providers, especially if your current agent is approaching bankruptcy. Getting caught by surprise could leave you without access to records or tax portals that you need to maintain your VAT compliance.
If your bills have changed a lot recently, or there’s been a sudden hike in price, that might be a sign that your service provider is in trouble. Delayed invoicing is another sign. As businesses run out of money, they tend to lose the resources they need to maintain regular billing cycles.
Is anyone answering the phone? Can you get a reply to your emails? Are support tickets being closed without answers? Companies running out of money are hard places to work. Unreliable pay checks, redundancies and the stress are all things that drive people away and prevent them from being replaced. Communication channels are often the first thing to be impacted in situations like this, as remaining staff struggle under increasing workloads.
Most VAT agents have some portal, dashboard or document sharing system that makes passing them things like your sales data easier. It’s a red flag if your access to these things becomes unreliable, but even more so if they stop working altogether.
When it comes to financial services like VAT providers, there’s no smoke without fire. Gossip alone isn’t worth acting on, but when paired with other warning signs, it might be time to leave. You might hear this at networking groups for your industry, on social media, or from another supplier of yours in a different industry.
If you start to feel like you want to switch VAT service providers (for whatever reason), the first thing you need to do is get all your documents in order. If it’s not already, get your sales data organised, as you’ll need it in hand to start work with your new agent. The next thing you’ll need to do is request copies of important documents.
Getting copies of documents related to your VAT records is so important. If you can, make sure you get copies of:
Being able to show previous submissions in the Czech Republic and Germany makes changing to another agent much easier. In the UK, HMRC will want to see the last submission, or they won’t allow another VAT Service Provider to take over your account.
Your VAT service provider missing submissions, letters or payments on your behalf means you’re more likely to be audited.
Ignoring letters from tax authorities could be disastrous. At a minimum, you’ll face penalties plus interest for non-compliance. If the tax authority is looking for documents to support past VAT refunds and you’re unable to supply past returns or supplier invoices, you’ll be required to pay back any reclaimed VAT, plus interest.
In France, your old/current agent will need to remove you from their portal before your new provider can take over your filings. The portal is how returns are filed, so if your old agent doesn’t do this, your new VAT service provider will have to negotiate with the French tax authority to take over your account before they can begin filing your returns. This can cause considerable delay in getting your VAT filings back on track.
Don’t panic if you can’t get your VAT provider to respond or if they’re already insolvent. You may be able to get copies of past submissions by contacting the tax authorities. You’ll need to provide proof of your registrations, like VAT certificates or past emails and explain what’s happening.
The process for obtaining copies varies from country to country, and some won’t provide them at all. It can take a while (several weeks) for your request to be processed. In the meantime, sort through what data you do have. Your next VAT service provider might be able to help you reconstruct missing filings, though usually for a fee.
If you are registered for Import One Stop Shop (IOSS), it is crucial for your previous agent to formally deregister you. IOSS numbers are tied to the intermediary through which they were registered (your agent) and cannot be transferred between service providers.
Your new agent won’t be able to get you deregistered – we've tried. Multiple times in the past, we’ve attempted to help get a business deregistered and every time we’ve been denied. Unfortunately, there’s very little workaround for this. It’s not as simple as just registering again - you’re only allowed one IOSS number at a time.
You can bypass your agent and contact the tax authority that issued your IOSS registration. Going around your agent will be slow. Expect a lot of back-and-forth with the tax authority, which will want a thorough explanation of what’s going on.
Seeing as it can take a long time, as soon as you know you want to switch providers, get started on getting deregistered. Particularly if your agent is slow to respond to communication or totally unresponsive.
Repeatedly failing to submit IOSS returns won’t just impact your IOSS registration. Persistent failure to file will result in all your One Stop Shop registrations being cancelled, and your business being excluded from all those schemes for two years. The EU refers to this as a “quarantine” period.
That’s a huge disruption to operating your business in Europe.
It’s a good idea to put together a calendar of the payment and filing deadlines that apply to your business. Once you have that, go back through and see if you have any outstanding VAT payments or unfiled returns. If your agent has missed filing or payment deadlines, it’s up to you to correct that. You’ll need to file late returns and make payments as soon as you can.
Despite the fault lying with your agent in these cases, you’ll still be the one who has to deal with any penalties or fees. As soon as you’ve noticed that your agent is failing to meet deadlines, contact the tax authorities where you have registrations. Notifying them of your situation. Explaining any potential delay you might have in meeting the next set of deadlines. Doing so could spare you from any further penalties.
Whilst you’re running down documents and contacting tax authorities, you also need to be looking for alternative VAT service providers. Maybe you already have one in mind – either way, it’s a good idea to do a little research on them before you make the switch.
If you have concerns that your VAT agent is going to go bankrupt or close suddenly, we recommend getting this out of the way as soon as you can. Just having a plan can make the whole situation much less stressful. Plus, you can jump ship as soon as you’re ready and reduce the likelihood that you miss another filing or payment deadline.
Once you know where you’re going, review your contract with your current VAT service provider. There might be termination of service clauses that include offboarding timelines or financial protections that you can make use of.
When it comes to choosing a new VAT service provider, there are several key things you should be looking for. Consistent, stable support is the minimum you should expect. Look for:
Every country has some sort of commercial register – a list of all the companies formed in that country. You can look up basic information about the company, including financial filings that can give you a clue to the business’s overall health and history. Some registers you can only access for a fee, but the majority allow you to retrieve basic information for free.
Look for late filings or missing filings of company accounts. Financial difficulty isn’t the only reason why a company might be late filing its accounts, but it is the most common one. Have multiple directors resigned at once? Senior staff might be leaving to escape association with a failing company.
Look for clear information about how they report to you, like monthly updates or dashboards. Are they willing to share copies of filings, payment confirmations, and messages with tax authorities?
The easiest way to find this out is to ask if you’ll have access to these things. You can also request sample reports or previews of dashboards.
Does this supplier have experience in your industry? Search their website and the wider internet for case studies and reviews that show successful outcomes for businesses like yours. Another good sign is that other businesses in your industry have partnered with them. For example, we're partnered with ILG, an award-winning 3PL provider.
Customer support makes all the difference, and reviews are a great marker for this. Check their rating, but also read the reviews. See if clients mention talking about communication. Mentioning specific staff by name is a green flag!
Get your documents:
If you’re registered in France:
If you're registered for IOSS:
When Your Provider is Unresponsive
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