sackable offence?

melysion

I'll keep this short. Please don't be judgemental if at all possible.

In a nutshell, I made out an invoice to a foreign national in US dollars as the country they are in are not in the euro zone. They are in a EU country however. When the company charges in US dollars, VAT is not usually payable.

However, I noticed late today that VAT has been added to the bill at 20% by the accounts department and sent out, presumably because the country is in the EU. I dont know, its only a guess. I guess i just stupidly assumed that VAT only applied to eurozone countries and all others paid in US dollars. Anyway. This I imagine means the customer has been overcharged.

My instinct tells me to come clean, say I've noticed the mistake and get a new invoice sent asap. However, I'm in a very vulnerable position as I'm still in my probationary period. It was a genuine error so I have to say I don't think it ought to be a sackable offence but perhaps I'm being naive. Things have been fine so far otherwise.

Takeaway_Addict

melysion wrote: »

I'll keep this short. Please don't be judgemental if at all possible.

In a nutshell, I made out an invoice to a foreign national in US dollars as the country they are in are not in the euro zone. They are in a EU country however. When the company charges in US dollars, VAT is not usually payable.

However, I noticed late today that VAT has been added to the bill at 20% by the accounts department and sent out, presumably because the country is in the EU. I dont know, its only a guess. I guess i just stupidly assumed that VAT only applied to eurozone countries and all others paid in US dollars. Anyway. This I imagine means the customer has been overcharged.

My instinct tells me to come clean, say I've noticed the mistake and get a new invoice sent asap. However, I'm in a very vulnerable position as I'm still in my probationary period. It was a genuine error so I have to say I don't think it ought to be a sackable offence but perhaps I'm being naive. Things have been fine so far otherwise.

Mistakes happen. I don't see this being a massive issue unless the invoice is tens of thousands.

I personally would come clean and sort the issue early rather than risk it being found out and it being a bigger issue but thats just me.

Just need to make sure its right next time.

monty-doggy

Surely honesty looks better than covering up? Much better to make sure you don't upset the customer by over charging otherwise you might cost your employer a lot more if they loose the customer altogether?

Honesty is definitely the best policy.

[Deleted User]

Mistakes happen hun, I remember when I made my first and went to accounts in shame, the person rectifying then made a mistake! It was like a rollercoaster:D

I got a book called don't sweat the small stuff, think I picked it up from one of them pound places

Is this something you can solve on your own? There is a difference between taking accountability and waiting till it gets found out or nothing done I'll always think xx

melysion

We aren't talking thousands. I reckon it's possible they have been overcharged about £50. I'm guessing the customer might notice themselves tomorrow in which case I'll just apologise and get accounts to make out a new order. Otherwise I'll go to them myself tomorrow and explain they have to pull the invoice

JasonLVC

melysion wrote: »

I'll keep this short. Please don't be judgemental if at all possible.

In a nutshell, I made out an invoice to a foreign national in US dollars as the country they are in are not in the euro zone. They are in a EU country however. When the company charges in US dollars, VAT is not usually payable.

However, I noticed late today that VAT has been added to the bill at 20% by the accounts department and sent out, presumably because the country is in the EU. I dont know, its only a guess. I guess i just stupidly assumed that VAT only applied to eurozone countries and all others paid in US dollars. Anyway. This I imagine means the customer has been overcharged.

My instinct tells me to come clean, say I've noticed the mistake and get a new invoice sent asap. However, I'm in a very vulnerable position as I'm still in my probationary period. It was a genuine error so I have to say I don't think it ought to be a sackable offence but perhaps I'm being naive. Things have been fine so far otherwise.

Hardly a sackable offence, businesses make small errors like this all the time.

In your defence, the VAT rules are incredibly complicated - I've made a career out of advising on the subject - so you could take a pro-active stance here and turn an error into an opportunity.

The VAT rules are different if you are selling goods or services. So if you are seling goods, the VAT charge is based on where the goods are going to. If selling services, the VAT charge is based on where the customer is located - nothing to do with currency. Currecy is just a means of payment, VAT always follows the supply, not the payment method.

Places like Switzerland, are in the EU physically but are not part of the Eurozone or European Union so a sale to Switzerland or Jersey would be VAT free (just like a sale to the USA), so as you can see, it is complicated and a newbie to the job is bound to get confused.

So, my view is to cough to the error and then comment that as the VAT rules are complex depending upon a variety of factors, then it may reduce errors in future by indicating on the order form/invoice raising process or maybe recommend that newbies on probation are given more detailed training on VAT procedures where there are nuances in the law.

At least that way, instead of just bringing a problem you made to the table, you bring the problem and a solution - so even if they don't like your solution, it shows you're thinking it through.

Best of luck!

melysion

Thanks for the advice. Feeling slightly better about it all now. The job is so different to what I've done before I guess I should expect to make some errors. But I am a perfectionist by nature and it's not easy knowing you can be given a weeks notice for just about anything. Horrible.

anamenottaken

You need to raise this as a learning point.

Why do you think the customer has been over-charged? Were you selling to a business or private individual? If a business then they would surely expect to be charged VAT. If it is a private individual they should know that VAT may be added.

melysion

Well - the company sells a service not goods and I know that eurozone (and I assume other EU countries) pay vat. We ask for their companies VAT number. Other countries are charged US dollars with no VAT. I have no idea why.

melysion

We sell a service to "businesses" - but these tend to be universities, hospitals that sort of thing.

JasonLVC

melysion wrote: »

Well - the company sells a service not goods and I know that eurozone (and I assume other EU countries) pay vat. We ask for their companies VAT number. Other countries are charged US dollars with no VAT. I have no idea why.

With exception of land related services like architect or planning, services are treated as being sold where the customer is.

So if your customer is un the EU and your business customer gives you their vat number when ordering, vat should not apply to your invoice. If customer is outside the EU (USA, swiss) then they don't have a vat number but no vatt is charged as they are not in the EU anyway and vat is only a tax on EU customers.

You might find you were right (albeit for the wrong reason as currency is irrelevant to whether vat applies) and that vat should not have been charged. Its important as your employer is paying over vat to the vatman and may not need to, thus cash flow gain if gay need not be charged plus happy customers who get cheaper (vat free) services. Win win.