Before we give you with the requests included in the review of VAT201 Declaration letter, keep in mind that SARS sends this letter after selecting a person for inspection, verification or audit, so it can properly administer any Tax Act (Section 40 of the Tax Administration Act).
If you receive a review letter from SARS, never ignore it. If you do, SARS will disallow all your input tax and assess you on all your output tax. It will also levy penalties and interest.
Note that the beginning of the letter announces that you were selected for a Vat review! And it will also state the tax period under review.
Important: Make sure you check the tax period, so you don't give SARS the wrong info!
SARS then asks you to:
1. Review your Vat return against your relevant supporting documents;
2. Correct any errors; and
3. Submit a request for correction.
We'll explain the above requests below and show you the steps you need to take to meet them:
Step #1: Review your Vat return against your relevant supporting documents
SARS wants you to re-check the figures you've filled in on your Vat return and check them against your supporting documents.
Make sure you didn't claim for these, or you'll be on the wrong side of SARS!
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Step #2: Correct any errors
Most Vat vendors get it wrong here! They don't read any further and just simply upload all their documents. Don't do this or you could open up a can of worms!
If you've made an error:
If you find you've made a mistake when you check your calculations, you need to correct this.
If you haven't made an error:
If you've re-checked your Vat return and haven't made any errors, write a short letter to SARS to say so.
Step #3: Submit a request for correction
As an alternative you must provide:
• Your company's output and input tax schedules;
• All documents relating to capital expenses claimed;
• Other records that would explain the variance in your return; and
• A copy of your letter from SARS (because of the barcode).
Make sure you get proof you submitted your documents to SARS
For detailed information and how to arm yourself against SARS when you receive the VAT201 Declaration letter, follow this link