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Is your business at risk of an SARS audit? Here's how to tell

by , 21 August 2014
Every business owner is terrified of SARS targeting them for an audit. The fear is that SRAS will find an error that not even you know is there.

What makes this fear worse is that you can't always tell when and if SARS will choose you for an audit.

But you can prepare and make yourself aware of the things that increase your risk of becoming a target.

So read on and find out if your company is at risk of a SARS audit...

 

Here's how to tell if your business is at risk of a SARS audit

 
According to the Practical Tax Loose Leaf Service, there are a number of factors that can increase your risk of a SARS audit.
 
You see, SARS compares all the information it gets from different sources to spot these factors and determine if it should audit you.
 
For example, SARS will make a comparison between your annual financial statement, Vat returns and tax returns. It'll also do this with the tax certificates you submit and the disclosures you made on your return. 
 
Here's how SARS determines whether or not you're a tax risk from this information.
 
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Here's how SARS will determine whether or not you're a tax risk

 
SARS will ask specific questions on your tax return to identify risks. It'll also send out payroll and transfer pricing questionnaires. 
 
It'll look for any large changes in ratios that it can measure against your annual financial statement.
 
So if you want to find out if you're at risk of a SARS audit, you must do the same. Look at your annual financial statement and all your tax or Vat returns to see if you can spot anything that's out of place or incongruent.
 
Just by doing this, you can see if you may have a SARS auditor knocking on your door soon.
 

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