APPENDIX
RESPONSE TO CONSULTATION ABOUT PROPOSED MEASURES
TO TACKLE MTIC FRAUD
"Our IT team process much of the purchasing
for this type of goods on behalf of staff. We would have to introduce
a new process to ensure that a copy of all orders placed came
to my Financial Accountant—who is responsible for preparing
the VAT Return. She would then have to arrange for the correct
process to be applied to these. I'm not sure at the moment whether
this could be built into our finance software or if this would
be a manual process.
Audio equipment is often purchased outside of
the IT team. We have recently invested £250,000+ in such
equipment. Digital camera/camcorders are also frequently purchased.
We would have to communicate the need to alert Finance specifically
about such purchases, but would probably have to rely on our own
additional reviews of relevant account codes to spot such purchases.
There is a risk that suppliers of this equipment
will continue to provide goods with VAT applied. Confusion and
hence poor relations with suppliers will prevail.
Our charity makes heavy use of corporate credit
cards—120+ staff have these. These types of portable items
are often purchased by this method. Monthly card expenditure is
imported into our finance system from an electronic file provided
by our Merchant provider. We would have to add an additional step
to our process to enable checks to take place for such spend,
with the appropriate accounting entries being made. With £800,000+
spent annually on cards, this would be an onerous task.
My conclusion is that there are several steps
that we could take to monitor spend of this nature, to ensure
that we were able to apply the reverse charge. However much depends
upon Finance staff becoming aware of such spend in the first place.
As we are looking at low value portable items that are purchased
by various staff, this will not be an easy task to enforce. My
estimate is that software costs of £2,000 would be required,
upfront time of approximately four days required for communication
and training and an on-going time requirement of one day per month
to review invoices, card spend and make adjustments for the reverse
charge. Clearly this is not good use of charity staff time."
CTRG member charity
September 2006
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