What is an indirect tax (or VAT in the UK) and what does a VAT accountant do?

An indirect tax is a type of tax collected by an intermediary (i.e. a shop) from the person who bears the ultimate economic burden of the tax (i.e. the consumer). This is typically known as a sales tax, a goods and service tax (GST) or as value added tax (VAT). In the UK, with some specific exceptions, VAT is added to the cost of nearly anything purchased by a consumer.

A VAT accountant provides advice to the business on general VAT liabilities, and specifically on the VAT implications of any transactions they are undertaking. They may also deal with management of the VAT compliance cycle, dealing with ad-hoc VAT technical queries and managing the VAT relationship with HMRC and other external VAT advisors.

Key responsibilities:

Responsibilities will vary, but examples include:

  • Delivering VAT reporting, ensuring VAT compliance and identifying risk.
  • Minimising VAT liabilities and compliance issues.
  • Ensuring all aspects of VAT transactions are captured correctly (e.g. in an ERP system).
  • Ensuring all month end processes are actioned on a timely basis.
  • Liaising with and managing the working relationship with HM Revenue & Customs during routine audits and ad hoc enquiries.
  • Forecasting of VAT payments, based on business growth, and ensuring payments to tax authorities are made accurately and on time.
  • Employing strategies to reduce the VAT/Duty liabilities where possible within the legislative framework.
  • Managing VAT reclaim processes on employee expense claims domestically.
  • Inputting into the group’s tax strategy.
  • Acting as a subject matter expert across the group, providing VAT support to tax accountants and head of tax.

Why are they important?

VAT Accountants are vital for many businesses as they can really impact the overall bottom line. In addition, whilst VAT is a complex and difficult tax matter, minor mistakes can be treated as fraud, so it is important to deal with VAT carefully.

Skills needed for this role

VAT accountants must have strong attention to detail. They should also have excellent communication skills, as they will need to be able to provide advice and information on complex issues to non-technical individuals.

Strategic Professional Options examinations linked to this role

Advanced Taxation

Career opportunities presented by this role

VAT accountants can work in a variety of different sectors and can work within a business or in practice, for an accountancy firm providing advice to a portfolio of clients.

Competencies

High level competencies required include:

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.

  • Taxation

    A. Communicates knowledge of the operation and scope of the tax system, obligations of taxpayers, and the implications of non-compliance and advises on tax planning.

    B. Advises ethically on strategic tax plans and computes the tax liabilities of individuals.

    C. Advises ethically on strategic tax plans and computes the corporation tax liabilities of individual companies and groups of companies.

    D. Explains and computes the effects of value added tax (VAT) / goods and services tax (GST) and indirect tax on incorporated and unincorporated businesses and advises appropriately.