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There are four expenses SARS targets during an audit! Are yours legitimate and correct?

by , 06 August 2014
SARS doesn't mess around when it comes to audits. A SARS audit aims to identify if you've lied or made errors in your documentation.

The SARS auditor will check all your documentation to look for any of these errors or lies. As part of these checks, he'll target four particular expenses.

Read on to discover what these expenses are so you can ensure yours are legitimate and correct...

 

These are the four expenses the SARS auditor will target

 
During a SARS audit, the auditor will focus on these four expense types:
 
1. Purchases
The auditor will check if you've recalculated and reconciled your purchase journal to your general ledger. He'll also look for any abnormal debit and credit entries in your purchase journal.
 
2. General expenses
He'll investigate any expenses he sees as risk areas. Then he'll look for any private expenses you claimed through the business. This check will also include fees you paid for professional services to ensure they're not capital in nature.
 
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3. Repairs 
The auditor will check to ensure the assets you repaired aren't capital in nature.
 
4. Salaries and wages
He'll check if you've deducted PAYE from your employees' salaries. He'll also check for PAYE deductions on bonuses, for abnormally high salaries and contributions such as medical aid and other fringe benefits.
 
The auditor will also inspect the Vat on your invoices at this point too.
 
If you've fibbed on any of these expenses or got them wrong the auditots will report it to SARS. From there, the findings will show you're guilty of misrepresenting your company's financial position.
 
This means only one thing: Penalties of up to 200%!
 
The only way to prevent this is to ensure all your business expenses are legitimate and correct!
 
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Eight ways to LEGALLY beat the taxman
 
There are a few CGT loopholes that can save you thousands of rands every single year and, in some cases, let you off the CGT hook completely… 
 
 
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