Here are the six tips you should follow if you want everything to be in order when it comes to your relationship with SARS
1. Make sure your Vat returns are up-to-date. Keep your current Vat returns and payments up-to-date.
This prevents SARS from penalising you and charging you interest. And it shows SARS you're trying to be compliant.
2. Don't forget to pay on time SARS charges Vat interest monthly. Always try to pay any Vat that's in arrears by the last day of the month. If you pay the next day, SARS will charge interest for the whole month!
3. SARS will usually remit the penalties. If your late payment wasn't intentional, SARS will usually remit the penalty.
Pay all outstanding Vat, penalties and interest, so SARS can remit the penalties if your late payment wasn't intentional and you're usually tax compliant.
Here are three examples where SARS usually won't think your late payment was intentional:
• If there was a strike;
• A big debtor suddenly let you down; or
• Your accountant was ill etc.,
Important: Make sure you can prove the above to SARS! Just remember that SARS won't remit the interest on late payment.
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4. Here is what you have to do in case SARS doesn't remit the penalty SARS must remit the penalty if you paid late because the government, province or municipality, or any state institution caused the late payment.
You have to hand in a request at a SARS branch for a penalty remission and attach a copy of the bank statement or other supporting documents. Contact your local SARS branch to find out what other supporting documents they need.
Moreover, if SARS doesn't remit the penalty, ask it to give you reasons in writing. If you're not happy with this, lodge an objection and if SARS rejects your objection, submit an appeal.
5. Note you need to ask SARS to allocate the remission
If SARS remits the penalty, it won't usually refund it, but SARS will show it as "unallocated payments" on the account statement for that tax year. You must write to SARS "Accounts Maintenance" at your local office and ask them to allocate the amount to a future tax period. Then reduce the payment for that tax period accordingly.
6. Finally, try clear a tax period in full
When paying off any Vat arrears, penalties or interest, always try to clear particular tax periods in full. Otherwise SARS will simply take the payment and continue to charge interest on Vat still due.