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Avoid these six common costly input tax errors that taxpayers are making.

by , 08 June 2015
If you make an error on your input tax claim SARS may think your company is fraudulent and dishonest. Even if it's really just an innocent error!

The Vat audit team at SARS will specifically look for these input tax errors when they audit you. This will result in penalties and interest from SARS.

To avoid delaying the Vat return process and SARS denying your input tax claim. Make sure you're not making the following six common costly input tax errors.

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Claiming your input tax has never been easier
 
We give you:

- One rule to follow when claiming input tax;
- Two input tax must-haves to get the thumbs up from SARS on your input tax claims; and
- How to claim input tax in two easy steps.
 
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If you answer yes to any of these questions, you've made a costly error with your input tax:
  1. Did you claim input tax when you rented a car, station wagon, combi or double-cab vehicle?
  2. Did you claim input tax on goods and services you bought for entertainment? 
  3. Did you claim on subscriptions to social, sporting or recreational clubs, sport or theatre tickets?
  4. Did you not claim goods upfront that you've bought under an instalment agreement, but on monthly payments? 
  5. Did you not claim on taxable supplies made to you? 
  6. Did you claim deductions but didn't have the necessary documents to back up your claim i.e.: Valid tax invoice
Read on to find out what makes a valid tax invoice.
 
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Get your tax invoices right the first time!
 
Do you know?

- What a valid Tax Invoice looks like;
- What information it must have; or
- When you need a full tax invoice.
 
 
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Eight requirements for a valid tax invoice:
 
  1. The words tax invoice in clear view;
  2. The name, address and Vat registration number of the supplier;
  3. The name, address and Vat registration number of the recipient;
  4. A serial number of the invoice;
  5. A full description of the goods bought;
  6. The mass or quantity of the goods bought;
  7. The amount paid for the goods bought; and
  8. The rate Vat is charged, the price of the goods, the Vat amount and the total of the invoice.
 
A tax invoice is an important document in order to claim input taxes. 
 
It's important to identify the two types of tax invoices.
 
  • Full tax invoice: when supplies taxable with a value of R 5 000 or more.
  • Abridged Tax invoice: when supplies taxable with a value of R 5 000 or less.
 
Remember: You don't need a tax invoice for transactions under R50, but you need to keep some kind of evidence of the transaction.
 
If you're reading this and you know you've got an incorrect tax invoice, don't despair I'll show you what you can do…
 
 
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Getting your VAT refund from SARS just got harder…
 
A small administrative mistake is all it takes for SARS to have the right to withhold your refund.
 
Put a simple zero in the wrong place on the new VAT return could and you can forget about getting even a cent of your money back.
 
Make sure this never happens to you by filling in the new VAT return 100% correctly every, single time. 
 
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What to do if the tax invoice is incorrect or incomplete?
 
If your supplier hasn't included your Vat number, return the invoice so he can correct it.
 
If he can't correct the invoice, then he must cancel it, issue you with a credit note and a new tax invoice created with the correct details.
 
P.S. For everything you need to know about Vat, simply attend the Vat Masterclass in Durban or Johannesburg. Follow this link before it's all fully booked!
 

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