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Revealed: Three ways SARS use to audit your business

by , 24 January 2014
SARS is always on the lookout for non-compliant behavior. It does this by conducting audits regularly. In fact, the taxman can use any of these three ways to audit your business...

SARS is now more empowered than ever.

And it can use any of the following three ways to audit your business…

Three ways SARS uses to audit your business

#1: SARS can arrive without an appointment

That's right. SARS can arrive at your business premises without making an appointment or giving you any prior notice. These visits take place for SARS to:

  • Administer a tax act;
  • Broaden the tax base;
  • Verify the existence of a business (they'll check if clients walk in and out of the premises and for signs that the business exists)

The Practical Vat Loose Leaf Service says the inspection, in these instances, can only determine:

#2: SARS can ask you to come in for questioning

Scary as it sounds, if SARS has concerns about your Vat returns or if it's received information about you that it wants to verify, it can ask you to come in for a meeting.

A senior SARS official must authorise the request for you to come in for a meeting.

The interview and questioning will only be limited to your tax affairs. This means, for example, SARS can't ask a husband to come in and answer questions about his wife's taxes.

#3: SARS can ask to conduct a field audit or criminal investigation

With a record audit at your premises, you'll need to know the following:

A senior SARS official must notify you, at least ten business days before they intend to turn up, of:

  • The venue, date and time (which must be during business hours) when they'll start the audit.
  • What they're coming to check – so they must say what tax period they want to see records for.
  • The audit must be in connection with a tax act and only relevant material may be asked for.

You don't have to fear SARS audits! Make sure your tax affairs are always in order and keep your company records in the correct format. In addition, read this article on how to survive an audit.

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