Have you ignored this block on your VAT201 return? Don't! Fill it in and get some money back from SARS
You've paid VAT to SARS on sales you make. But your client's business isn't doing well and now they don't pay you. And you have to write it off.
It doesn't matter if your debtors haven't paid you. This means your cash flow suffers badly.
The good news is, you can claim the input tax from SARS by filling in this one block on your VAT201 return. Here's how...
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.
I'll show you how here.
Make sure you fill in this block on your VAT201 return and claim bad debt as an input tax deduction
Before I tell which block to fill in, you need to take note.
Here's the clincher.
You can only claim it during the tax period you actually write the debt off as irrecoverable. And only
if you have proof that you did everything reasonably possible to recover the money!
Be careful though, if you're registered on the payments basis you can't make the claim. This is because you only account for your VAT and pay it to SARS when you receive actual payments from your debtors and you wouldn't have paid the VAT to SARS anyway.
You claim this input tax back at block 17 on your VAT201 return.
SARS will want to see your doubtful debt policy (i.e. your business policy to deal with bad debts). If you don't already have this policy, create one now
If you can show SARS that you apply this policy across the board, then you're more likely to qualify for the allowance when your customers fail to pay on time.
For a checklist on 19 other little-known items you can claim an input tax deduction on, get your copy of the Practical VAT Loose Leaf now