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Do you know the consequences of late Vat payments

by , 09 September 2014
It's your responsibility to make sure SARS receives your Vat payments correctly and on time.

You can make your payments by using any of these payment options: eFiling, Electronic Funds Transfer (EFT) through Internet banking and by making a Bank Deposit.

While SARS has made these payment options available, Vat vendors continue to make late Vat payments.

As a result, they face certain consequences.

Keep reading to find out what these are so you can ensure your Vat payments are never late.

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You'll face these consequences if your Vat payments are late

If you make a late Vat payment you'll be handing more money to SARS as it'll add a hefty penalty onto the outstanding amount, as well as a monthly interest fee for each month the payment is late.

You'll get a 10% penalty when it comes to your outstanding Vat obligation and SARS will charge you interest at the existing interest rate, per month, which isn't tax deductable.

According to the Practical Vat Loose Leaf Service, when your Vat payment is late, SARS first allocates the payment to settle the penalty, and then allocates the balance to the tax. After month end, it then seems like there's been a short-payment on the tax portion of your Vat account, so SARS charges you interest on the outstanding balance from the first day of the following month.

As you can see, late Vat payments come with serious consequences. Convenient payment options are available to you, so there's no excuse to not pay your Vat on time.

So save yourself time and avoid unnecessary fines and penalties by making your Vat payments correctly and on time.

If you have any questions regarding Vat payments, ask our experts at the Accounting & Tax Club.

Confidential: The 13 Vat secrets SARS doesn't want us to publish

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