Five Interconnected Compliance and Operational Risks
Forti Ltd’s initial discovery call uncovered a cluster of issues common to fast-growing Irish SMEs that have prioritised operational expansion over financial governance. Each issue was individually addressable — but left unattended, any one of them risked triggering a Revenue inquiry or creating personal tax liability for the directors.
1.
Payroll irregularities and missing payslips
Payslips were issued inconsistently or not at all — including to the business owners themselves. A final demand from Revenue for outstanding PRSI arrived despite assurances from the accountant that all obligations were being met, signalling a gap between reported and recorded figures.
2.
Revenue estimation cycle — €40K payment discrepancy
A 2025 bank review revealed €95,334 paid to Revenue for the year, including a €40,000 estimated payment that was subsequently refunded. A recurring monthly VAT direct debit of €4,166 ran alongside separate PRSI amounts. The total Revenue position had never been reconciled into a single clear picture.
3.
Undocumented director loan with tax exposure
50% of original funding came from a personal loan injected by a director. Repayments flowed directly from the business to the lender rather than through a director’s loan account — a structure with potential tax implications. No formal loan documentation existed, despite the business capping repayments below a threshold where additional tax becomes payable.
4.
No management accounts — year-end reporting only
Despite approaching €1M in annual revenue, no management accounts were being produced. The most recent CRO filing was available in abridged form only. Without monthly or quarterly accounts, the business had no visibility over cash flow, per-location profitability, or true margin on car sales.
5.
Inter-site invoicing gap distorting the margin scheme
The two locations were not raising inter-company invoices for pre-sale vehicle preparation. Under the motor dealer VAT margin scheme, accurate cost-of-sale recording is essential — without it, the margin and VAT on car sales were both potentially miscalculated.