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Three common mistakes that could trigger a SARS Vat audit

by , 02 January 2015
As a Vat vendor, you have very specific guidelines you must follow. These guidelines help SARS manage all vendors.

If you don't follow these guidelines, SARS will audit your company. This could mean months of SARS digging through your documents and slapping you with additional fines.

To help you avoid this, we're revealing three things you must never do...

 

Avoid a Vat audit by ensuring you don't do these three things

 
1. Never claim your input tax prematurely
Be careful not to claim input tax before you're entitled to it. For example, if you buy fixed property, you can only claim the input tax on the amount you actually paid for it. If you try claim the input tax before you actually pay it, you won't have any documentation to prove your claim.
 
You also aren't entitled to that money at that point because you haven't paid it.
 
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2. Never attempt to claim input tax on these four expenses
Don't claim input tax on:
 
1. Client lunches; 
2. Staff teas; 
3. Meals and parties; or 
4. Car hire. 
 
SARS is always on the lookout for these claims and will disallow them with penalties and interest. It may even slap you with 200% additional tax if it previously told not to claim the Vat on these expenses. 
 
To check what other expenses you can't claim input tax on, check out the Practical Vat Loose Leaf Service
 
3. Never deduct penalties or interest you paid to SARS 
Don't claim interest, penalties or additional tax paid to SARS as an income tax deduction in your financial statements. These aren't deductible and will only result in SARS imposing more penalties.
 
Avoid a Vat audit by ensuring you never make these three Vat vendor mistakes.
 

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