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Six documents you must prepare when facing a Vat audit

by , 06 August 2014
No company is immune to a Vat audit.

If SARS believes something on your Vat returns isn't right, you could face an audit. But, SARS could also randomly select your company for a Vat audit.

If SARS picks you for a Vat audit, preparation is key. You mustn't be overwhelmed by fear. You have to prepare thoroughly by having the right documents.

Take a look at the six documents you must prepare when facing a Vat audit.

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Prepare these six documents when facing a Vat audit

According to Marius van der Westhuizen of Van Der Westhuizen Konsult, SARS will investigate six items if your business is facing a Vat audit. It's for this reason he says you must prepare these six documents:

#1: Your Vat return totals. SARS will check this against your general ledger and summary.

#2: Your Vat control account. The taxman will review this to test your accounting system for errors.

#3: Your tax invoices. SARS will check these to see if they're valid.

#4: Records of previous Vat audits.

#5: Vat refunds. SARS will go through your history of Vat refunds for any mistakes that you carried over.

#6: Assets and liabilities. SARS will look at the value of your assets and liabilities when you registered for Vat, as well as your capital assets acquired to ensure you're making the correct Capital Gains Tax claims, says van der Westhuizen.

That's not all.

SARS will also check these things when it conducts a Vat audit, so make sure you're prepared:

  • It'll investigate how you've classified your trade.
  • It'll check your type of taxable supplies.
  • Lastly, it'll check if Vat interest and penalties were added back into your records.

When it comes to Vat audits, having the right documents is key. They'll help prove your innocence when SARS questions you. So make sure you prepare these six documents when facing a Vat audit.

If you need more information on Vat audits, check out the Practical Vat Loose Leaf Service.

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