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THIS is your best course of action when you can't pay SARS on time

by , 17 January 2017
THIS is your best course of action when you can't pay SARS on timeAs a Vat vendor, you have a duty to pay Vat on time.

But, the reality is that the current economic situation is making it harder to comply with this legal duty. Don't even get us started on unforeseen disasters that strike at any moment and make it impossible to meet Vat deadlines.

But, it's not all doom and gloom.

You have options if you can't pay SARS.

Read on to find out what to do when you can't make your Vat payment to SARS on time.

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Do THIS if you can't meet your Vat deadline

If, for instance, you're struck by an unforeseen disaster, for example, a virus wipes out all your computer records or if you don't have enough money to pay your Vat liabilty, write to SARS immediately and explain your situation, says the Practical Vat Loose Leaf Service.

This is your best course of action because it'll help ensure you get a smaller penalty for your non-compliance. It also shows that you're an honest Vat vendor, something SARS holds in high regard.

In addition to the letter that explains why you'll have difficulty working out your Vat liability, make a provisional deposit of the amount of Vat you estimate you'll owe. You can also include your Vat reference number and tax period.

Later, when you can account for your Vat, refer back to the amount you estimated you'd need to pay SARS. If you've paid more than what you actually owe, SARS will refund you that excess. If you short-paid SARS, you'll have to pay in the difference.

While it's still likely that SARS will raise penalties and interest on the shortfall, you'll have a good case to argue for remittance of this amount.

Keep this in mind when you can't pay SARS.

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SARS will be more forgiving if you make an effort to explain why you can't pay

That's right.

SARS isn't the bad guy as most people like to believe. It understands that everyone runs into problems from time-to-time. All it wants is for you to be upfront with your affairs, even when you can't pay it on time. So make sure you comply.

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