Facing a Vat audit? Make sure you have these ten financial records at hand...
Nothing causes more panic in a business owner than receiving notice from SARS that your business faces a Vat audit. But most of the panic comes from uncertainty of what to expect. You may not even have done anything wrong, so don't worry. Your Vat audit may have been triggered simply because your accountant entered a zero in the wrong spot on your Vat return. In the mean time, here are ten financial records SARS will want to inspect during a Vat audit - make sure they're easy to access during your Vat audit.
Is your business facing a Vat
Don't worry, they're becoming increasingly common.
Especially as putting a simple zero in the wrong place on your Vat
return is now all it takes to trigger the Vat
audit process that could cost your business thousands, says FSP Business.
That's why Vat
audits and Vat
issues are getting businesses into hot water around the world.
In fact, Trinidad and Tobago's National Agricultural Marketing and Development Corporation (Namdevco) has just come under fire after an internal procurement audit unearthed multiple cases of contracts being awarded to companies without Vat registration
, the Trinidad Express
Locally, your best bet to surviving a Vat
audit it is to understand what SARS checks for in a Vat
audit, says InspiringWomen
Ten items SARS will investigate if your business faces a Vat audit!
Even if it's a Vat
audit you're facing, remember that SARS will want to check the overall financial records of your business.
But don't panic – there are ten items that SARS will want to look into if your business has been selected for a Vat
audit, says InspiringWomen:
Your Vat return totals will be checked against your general ledger and summary
Your Vat control account will be reviewed to test your accounting system for errors
SARS'll check if Vat interest and penalties were added back into your records
Your tax invoices will be selected and tested – make sure they clearly state 'tax invoice' and not 'Vat invoice!
Your debtors will be checked
SARS'll investigate how you've classified your trade
A record of any previous audits will be examined
Your type of taxable supplies will be checked
SARS'll also go through your history of Vat refunds for any mistakes that've been carried over
Lastly, SARS will look at the value of your assets and liabilities when you registered for Vat as well as your capital assets acquired to ensure you're making the correct capital gains tax claims.
Go through these financial records today to check for any discrepancies before your Vat audit!
If you've gone through all these financial records yourself and found no discrepancies, there's nothing to worry about.
Simply having these financial records at hand will cut the time it takes for your Vat
audit in half, says FSP Business
Ensure you complete your Vat
return correctly - by having all your financial records on hand - , get your hands on the VAT201 e-report. In it you'll find:
How the five new changes to the Vat return affect your declarations
How to use the 'refund dashboard' to get your refund quicker
Your 100% correct and complete Vat return in seven simple steps
Exactly what you need to do when you receive an audit notification from SARS
The six new payment methods SARS has just introduced!
The five circumstances when you can make an adjustment
And so much more!
Get your VAT201e-report here