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Make any of these four Vat mistakes and you're setting your business up for a Vat audit

by , 02 January 2015
The Tax Administration Act (TAA) gives SARS the power to select you for an audit either on:

• A risk assessment basis; or
• A random assessment basis.

You may get away with SARS not picking you randomly by luck. But, there are mistakes that could trigger a Vat audit instantly.

And trust me, a Vat audit is the last thing you want. SARS will turn your business upside down as it looks into your books. It will also keep you on its black book and flag you for audits more often.

Keep reading to find out the four mistakes you must NEVER make so you can avoid setting your business up for a Vat audit.


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These four mistakes could trigger a Vat audit. Avoid them at all costs

 
#1: Giving SARS incorrect answers on your Vat registration form.
 
You must be clear about the type of business you conduct. For example, don't tell SARS you only make exempt supplies when you make both exempt and taxable supplies.
 
Plus, don't make mistakes about your turnover.
 
As you know, your turnover is a key Vat registration requirement. If you make a mistake about this too, SARS will get suspicious.
 
#2: Paying your Vat late.

SARS looks at your behaviour as a Vat vendor. If you make your Vat payments late by mistake, you'll trigger a Vat audit, says the Practical Vat Loose Leaf Service.

Always pay your Vat on time.

#3: Making mistakes when it comes to output and/or input tax for certain periods.

If, for example, there are big differences between your output or input tax for certain periods, SARS will flag you for an audit.

It won't think there's a zero that you didn't include by mistake. It will audit you because it suspects you're trying to avoid paying tax or you want to get more money from it.

#4: Putting amounts on the Vat return into blocks you don't normally use.

This honest mistake could trigger a Vat audit. That's why it's important to always double check your Vat return before you submit it.

Inserting amounts in the zero-rated or exempt supply blocks on your Vat return is also another trigger. So be careful.


You must always be truthful when it comes to your Vat return


SARS always looks for red flags when it comes to your Vat affairs. So don't give it a reason to audit your business by making these mistakes. Avoid them at all costs.

PS: We strongly recommend you check out the Practical Vat Loose Leaf Service. It gives you tips, tools and advice to comply with the Vat Act.


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