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Reduce your Vat liability - avoid these eight Vat risks

by , 12 November 2014
If you get anything in the Vat process wrong, it could trigger a Vat audit. If this happens, SARS will investigate every angle of your business to find further errors.

But there's a lot you can do to prevent this from happening.

For example, if you avoid these eight Vat risks, you can reduce your Vat liability substantially and avoid a SARS Vat audit.

Read on to discover what they are so you can avoid them...

 
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Avoid the eight red-flags that will trigger a SARS Vat audit 

 
1. Your answers on the Vat registration form. Get these wrong and SARS will investigate your company to see if it's legitimate; 
2. Your behaviour as a vendor (e.g. Do you submit and pay your Vat on time? Do you fill in 'nil' amounts on your returns, etc.);
3. Any written correspondence from you to SARS. Be careful of these because SARS could use this as proof against you if you do anything wrong;
4. The type of business you run such as retail, mining, manufacturing, financial services, etc. These industries are more vulnerable to Vat audits. If you're in one of these industries you keep your Vat process 100% in order;  
5. Major differences or variances between your output and/or input tax for certain periods;
6. Large and/or regular refunds claimed;
7. If you insert amounts in the zero-rated or exempt supply blocks on the Vat return;
8. If you insert amounts on your Vat return into blocks you don't normally use.
 
SARS is always on the look out for errors and mistakes such as these. Avoid these and you could also avoid a Vat audit.
 
For more on how to avoid a Vat audit, check out the Practical Vat Loose Leaf Service
 


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