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Four scenarios when SARS will send you the dreaded VAT201 Declaration letter

by , 04 May 2015
Four scenarios when SARS will send you the dread VAT201 Declaration letter

There are four instances when you will receive SARS' Review of VAT201 Declaration letter. And in case you haven't received this letter before, here are the factors that lead to SARS sending this to you.

You can expect a VAT201 letter when your Vat return::

1. Is a large refund;
2. Has amounts relating to zero-rated or exempt supplies;
3. Has amounts filled in blocks you don't normally use;
4. Figures vary considerably from your previous Vat declarations.

Let's take a closer look at each of them

1. A large refund - happens when your input tax is more than your output tax. You've paid more Vat than you've charged on your income.

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2. Zero-rated or exempt supplies

If you receive income from zero-rated or exempt supplies, fill that income into blocks 2, 2A or 3 of your Vat return.

Note: You can't claim any relating input tax on exempt supplies as they fall out of the Vat scope completely.

SARS will check for input tax incorrectly claimed against exempt supplies.

3. You've filled in blocks on your VAT201 return you don't normally use.

If you insert an amount into one of the blocks (output or input) that you don't usually use, it will trigger an alarm bell at SARS.

4. The final situation refers to variations in your usual Vat return figures
This is where your output tax or input tax is much higher or lower than that of the previous tax periods

P.S. For detailed information and how to arm yourself against SARS when you receive the VAT201 Declaration letter, follow this link

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