Is it necessary to keep company records?

You must keep your company records:

1. To benefit your company by meeting the Vat law's specific record-keeping requirements; and
2. So SARS can satisfy itself that you've kept to the law.

Basically, record-keeping is the most important aspect of your Vat management strategy as your records are the proof you need to substantiate your claims and returns to SARS.

According to the Practical Vat Loose Leaf Service, SARS can conduct a Vat audit on you within five years of assessing your Vat returns to query or examine your audit trails and accounting methods. And if your records don't comply, you'll face serious penalties of up to 200% now that the TAA is in place.

Your records must match up to what SARS wants.

These are the three things your records must show:

1. You must keep your records in their original form or in a manner authorised by SARS or by a senior SARS official;
2. Keep them for five years; and
3. Keep them available and open for SARS inspection.

That's not all.

Make sure you keep these 16 financial records for five years

1. Ledgers;
2. Cash books;
3. Journals;
4. All books of account;
5. Till readings;
6. Tax invoices;
7. Creditor statements;
8. Debit notes;
9. Credit notes;
10. Paid cheques;
11. Cheque books;
12. Bank deposit slips;
13. Bank statements;
14. Debtors' lists;
15. Creditors' lists; and
16. Financial statements.

Remember, one tiny error in your company records could make you liable for severe Vat penalties and interest from SARS. Now that you know the importance of keeping your records, use these four tips to keep your physical and electronic records safe.

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