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14 ways to avoid a nasty Vat audit

by , 02 October 2014
Vat is a complicated form of tax and it's easy to make mistakes. After all, when you have to deal with input tax, output tax, zero-rate supplies, Vat exempt supplies, tax invoices and all the other elements, it gets a bit overwhelming.

Because of this, Vat audits are a very real danger.

Luckily though, we can help you. We have 14 tips that will help you avoid Vat audits to protect yourself against any troubles with SARS.

Read on to find out what these 14 tips are...

 Use these 14 tips to avoid a Vat audit

 
Tip #1: Ensure the turnover figure on your financial statements matches the figure on your return;
 
Tip #2: Reflect all figures for all your sales, even if they're zero-rated;
 
Tip #3: Don't claim input tax on exempt supplies;
 
Tip #4: Reflect big capital purchases in Block 14 of your VAT201 return;
 
Tip #5: Reflect sales of capital assets in Block 1A of your VAT201 return;
 
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Tip #6: Investigate unusual increases in your turnover;
 
Tip #7: If you claim a big refund, arm yourself with the relevant information and documents because you'll probably get a call from SARS;
 
Tip #8: Always ensure your tax invoices are valid and correct;
 
Tip #9: Always submit your Vat return, even if it's a 'nil return';
 
Tip #10: Never claim your input tax prematurely;
 
Tip #11: Declare the output tax on fixed property immediately;
 
Tip #12: Claim input tax on motor vehicle rental payments as and when you make them;
 
Tip #13: Never attempt to claim input tax on these expenses:
 
  • Client lunches;
  • Staff teas;
  • Meals;
  • Parties;
  • Car hire.
 
Tip #14: Never try to deduct penalties or interest paid to SARS.
 
Use these 14 tips to avoid Vat audits and stay out of trouble with SARS.
 
Ex-SARS auditor reveals: Five red-flags SARS looks for when doing a Vat audit


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