One year into the successful implementation of VAT, early-day jitters of tax implementation have evolved, giving rise to a tax era. Beginning 2019, the FTA (Federal Tax Authority) will conduct official tax audits. They will roll out a five-day notice to eligible taxpayers, following which the audit will be conducted at the taxpayer’s business premises.  

 Audits can be stressful for business firms, given their time-consuming nature, it can result in loss of productivity. Good bookkeeping practices help keep the house in order and provide businesses with updated financial activities and data.  

 Below measures if taken now, will help make the audit a seamless affair. 

 Hire a Professional

The understanding of tax language requires professional expertise so business firms do not miss any fine prints and can concentrate on their operations. Therefore, hire a qualified tax consultant, one who is listed and recognized by the FTA, as he can represent you in an audit through organized documentation. A tax consultant’s sound knowledge helps business firms avoid tax penalties, as he keeps clients compliant with tax obligations all times. 

 Maintain a Good Book-keeping         System

We cannot stress more on the fact that good record keeping is like saving for a rainy day. While maintaining a good bookkeeping system is mandatory, it also helps safeguard assets and records. Keeping a track of the inflow and outflow of cash can be an added expense, but it helps to avoid financial implications. 

 Maintain Physical records

While electronic records are easily accessible, the habit of maintaining physical records play an important role too. It reflects the preparedness of a business to face an audit at any given time. An organized inventory of records can be resourceful during tax audits. Hiring a professional, one who can review and gauge the accuracy of records can be helpful. 

 Reconciliation

Ensure numbers filed in VAT returns reconcile with the accounting ledgers to avoid any inconsistencies. Get the help of a professional, before it’s too late. 

 We hope with the above suggestions and tips, we have helped you understand how to be tax audit ready. Even if not audited, the above tips help businesses stay organized and updated, through which good decision making can be done.