Readers’ forum: Irish problem

One of our audit clients is a major clothing retailer and all of the company sales are generated online and all sales are business to consumer (B2C).

The finance director has approached us and has told us that since 2013 the company has made annual sales of about £500 000 including VAT to Irish-based customers. Further it has always charged 20% UK VAT on these sales apart from children’s clothing which is zero rated. She realises that the company should have registered for VAT in Ireland in March 2013 under the distance selling rules so there is now a major VAT problem.

What are readers’ thoughts on how this problem should be resolved both historically and moving forward? All stock is held in the UK and despatched to customers – there is no warehouse or office in Ireland.

Query 19...