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In chapter O04: Overdue VAT account
s of the Practical VAT Loose Leaf Service,
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Three instances when you could have an overdue VAT account
There are three common instances that give rise to an overdue VAT account. This is when:
You can't afford to pay SARS and don't pay in time;
You receive an assessment from SARS showing you owe them money; and
You realise you made a mistake on a previous VAT return and now you owe SARS money.
Read on as I explain Tim's situation. How he got an overdue VAT account because he didn't pay his VAT in time.
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Instance #1: You can't afford to pay SARS and don't pay in time
When you eFile your VAT return, the system will calculate if there's VAT payable to SARS, or if SARS owes you a refund.
If you owe SARS VAT, you must pay it in the month following the end of your tax
period. Or your VAT account becomes overdue from the first day of the following month.
As I promised earlier, let's take a look at Tim's situation.
Tim has a VAT registered company. He receives payment for services in the month of June, which falls in his June-July tax period.
At the end of July, he calculates the VAT on his services that he has to pay over to SARS from his June-July tax period, and finds it's worth R10 000.
He has to pay this amount to SARS by the end of August (the month after his tax period ended).
But Tim's company is struggling financially and they can't pay this amount by 31 August. On 1 September his VAT account becomes overdue.
But this is just one instance when your VAT becomes overdue. There are two others you need to know about and I get into all the detail in the Practical VAT Loose Leaf Service
Also in the Practical VAT Loose Leaf Service
, I also tell you the three lifelines you can use when you have an overdue VAT account so you don't land up with hefty penalties and interest. Try it out for yourself. And if you find it truly doesn't help you with your VAT compliance, return it back to me within 30 days for a full money-back refund. No questions asked. Start your money-back trial here