Make any of these four invoice errors and you're setting your business up for a Vat audit
You know that not making timely Vat payments triggers a Vat audit.
But what you may not know is making errors on your invoice is another trigger.
If SARS spots certain mistakes on your invoices, it will come running to conduct a Vat audit on your business. And as you know, SARS will turn your business upside down during this process and slap you with harsh penalties if it finds something wrong.
Don't take chances.
Keep reading to find out the four invoicing errors you must never make so you can avoid a Vat audit.
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To avoid a Vat audit, never make these four invoicing errors
Don't issue standard rated invoices in foreign currency.
Remember, exchange rates fluctuate. So the Vat might be higher on the tax invoice
when the currency changes. This puts you in a situation where you're out of pocket and at risk of an audit. Always issue your foreign currency invoices in Rands.
Don't forget to include the recipient's Vat number.
It's a legal requirement that you include the recipient's Vat number. In addition, don't put the wrong trading name of the recipient on the invoice.
Don't incorrectly label the document as 'Vat invoice' instead of 'tax invoice'.
'SARS disallows any input tax you claim using a document you call a 'Vat invoice'. What's more, it will audit your business', says the Practical Vat Loose Leaf Service.
Don't forget to mark copy tax invoices as a 'copy'.
If you don't mark the invoice, SARS will think you've issued more than one original tax invoice and will penalise you as the supplier.
When it comes to tax invoices, remember this all important tip so you can avoid a Vat audit
You have a duty to make sure you issue and receive valid tax invoices.
So, if for example, you receive tax invoices with any of these errors, ask your suppliers to credit the incorrect invoices you have and re-issue proper tax invoices. If you realise you're the one who made a mistake, correct the error and re-issue proper tax invoices too. If you don't, SARS will audit your business and penalise you for these mistakes.
Now that you know about these four invoicing errors, avoid them at all cost.
PS: To be on the safe side and avoid triggering a Vat audit because of your tax invoices, check out the Practical Vat Loose Leaf Service.
It gives you the ten details your tax invoice must contain to be valid and much more.
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