For this weeks question, I’m actually going to ask two questions. The usual how would you identify this loss? and a second question – does this fall under the remit of Revenue Assurance?
This weeks scenario:
In the UK, VAT on mobile phone calls is calculated in one of two ways; for calls originating within the EU VAT is charged at 17.5% (the standard UK rate) for calls originating outside the EU VAT is zero rated. The operator I was working for had assumed that IT systems were calculating these figures accurately and were paying the VAT man accordingly. However this was not the case and the operator was in fact paying 17.5% of ALL prepaid call revenues to the VAT man. Needless to say the financial implication of this was massive.
I’ve slightly simplified the above scenario – as I don’t want to delve into the legislative joys of VAT, but hopefully I have painted the under-lying picture.