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Three things Vat vendors must do to prevent a company Vat nightmare

by , 31 October 2014
If you're a Vat vendor, you need to be aware of the rules. Otherwise, SARS will audit your business. This will turn into a Vat nightmare fast as SARS scrutinise every aspect of your business.

You can avoid this though if you simply obey the rules and do what SARS expects you to.

Here are particular things you need to do to ensure SARS doesn't come after your business...

 

These are three things you must do as a Vat vendor

 
1. Get tax invoicing right 
This won't just help you optimise your input tax claims, it will help you stay legal. 
 
SARS applies stringent standards for invoices and it's imperative you get them right. While it's possible to go back and rectify incorrect or incomplete invoices, it will involve delays in claiming back your input tax.
 
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2. Account for your Vat correctly
SARS provides two methods for you to account for Vat. One is the payments basis and the other is the invoice basis. If you account for VAT on the payments basis, it means you must account for output tax (the Vat you charge to your customers) as you receive payment. Similarly, you only claim your input tax when you have actually paid your suppliers.
 
3. Determine when SARS expects you to pay your Vat
Your tax period will determine this. Depending on the size and turnover of your business, you'll have to pay over your output tax to SARS at specific and regular intervals.
 
Check out the Practical Vat Loose Leaf Service for more on your duties as a Vat vendor.
 


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