SARS does random Vat audits. So if you haven't had one yet, you could be next on the list even if you don't raise any red flags. The reality is that there's no escaping a Vat audit, but you can get SARS quickly in and out of the door so you can continue with business. Read on to find out how.
How to get your Vat documentation right – first time, every time
Did you know...that in the vast majority of cases SARS has issues NOT with your interpretation of the Act, or with fancy avoidance schemes, or even with complicated transactions, but with your documentation?
Avoid making this mistake...Learn more here
The items SARS will check when they do an audit
Here are the items SARS will check when they do a Vat audit. Make the Vat audit process easier for yourself by having these documents up to date and ready before SARS shows up!
1. Your Vat return totals as reflected on the Vat201 return compared to the general ledger and summary;
2. Your Vat control account will be reviewed to test your accounting system for errors;
3. SARS will check if Vat interest and penalties were added back into your records;
4. Your tax invoices will be selected and tested – make sure they clearly state 'tax invoice' and not 'Vat
5. Your debtors will be checked;
Without this one Vat document, your business could lose out On R1.07 million!
Six more items that SARS will check
6. SARS will investigate how you've classified your trade (the exact type of enterprise will be checked);
7. A record of any previous audits and results will be examined;
8. Your type of taxable supplies will be checked;
9. SARS will check your history of Vat refunds for any mistakes that have been carried over;
10. SARS will look at the value of your assets and liabilities when you registered for Vat; and
11. SARS will be interested in the capital assets acquired
I am sure you are now your next Vat audit will go smoothly. Discover more
of the steps the audit team will take when they audit your business.
Managing Editor, Practical Vat Loose Leaf
Ps .I trust these steps will come in handy before your next Vat audit. Do you have more questions on Vat audits? Join our accounting and tax club and get expert advice. Sign up is free