All VAT-registered persons are required to file a Return of Trading Details (RTD) following the end of their accounting period, which is usually aligned to the financial year.

The RTD is a statistical return summarising actual sales and purchase figures, the VAT on which was included in the less detailed periodic VAT returns during the accounting period. The return gathers the information through four key questions, as follows:

• Have you made supplies of goods or services?
• Did you acquire any goods or services from the European Union, including Northern Ireland?
• Did you purchase goods or services for resale?
• Did you purchase goods or services that are not for resale but where VAT paid on them can be claimed as an input credit?

The fields on the return are completed using the net sales or purchase figures at the various VAT rates applicable to the relevant transactions. For example, the net total sales of goods and services supplied for Question 1 will be broken down into the various VAT rate categories (9%, 13.5%, 23%, etc.) and included in the return based on the total for each rate.

RTD Impact

The RTD must be filed on the 23rd of the month following the end of the accounting period. Therefore, if you have an accounting period which ends on 31 December 2019, your RTD is due to be filed by 23 January 2020.

The return is a statistics return, and as such does not of itself carry an obligation to pay any VAT liability. Essentially, the RTD is used as an audit tool to assist Revenue in verifying the accuracy of your periodic VAT returns filled during the accounting period.

In Association with

Revenue has further emphasised this point in recent guidance by stating that when a nil RTD is filled it will be rejected when there have been positive values in the VAT returns for the accounting period.

Therefore, it is important to ensure that your RTD reconciles with the VAT returns made to Revenue in the period that it covers. We would recommend that a reconciliation of the RTD with the VAT returns is carried out, because it is quite likely that one will be carried out by Revenue, and if there are discrepancies, Revenue may choose to audit your business.

In contrast to VAT returns, there is no option to complete a ROS Offline file in respect of the RTD – the return must be completed ‘live’ on ROS.

Failure to file an RTD can affect the cashflow of your business, as tax refunds, under any tax head, can be withheld until the RTD has been filled. Also, Revenue may refuse to issue tax clearance certificates until such time as the RTD has been filed.

In order to aid you in completing annual RTDs and to ensure that the information provided to Irish Revenue is correct, we recommend that you fully utilise the functionality of your ERP/accounting systems and ensure the tax and VAT codes within your system take account of the data required to be declared in RTDs.

In addition, preparing the RTD on a periodic basis when you are preparing your periodic VAT return will alleviate pressure during the ‘year-end’ process.

Despite an overhaul in recent years, the RTD still contains obvious flaws and its completion, in parts, is certainly open to interpretation by the taxpayer. Furthermore, in the absence of definitive guidance from Revenue, it is not surprising this is a return that taxpayers often have difficulty completing.

• Christopher Connolly (pictured) is a Manager in Deloitte’s Indirect Tax department. Email: chrconnolly@deloitte.ie