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Two things you can do to avoid Vat penalties

by , 01 September 2014
Facing Vat penalties is every business owner's nightmare.

We don't blame you for being scared as Vat penalties mean you'll have to pay large sums of money to SARS and, what's worse is you could land in jail.

The good news is you can put an end to this nightmare by doing the following two things -they'll help you avoid Vat penalties!


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Do these two things to avoid Vat penalties
 

#1: Manage your tax debt/liability correctly

You must give full and accurate information when you request a deferred or installment payment arrangement, for example, if you can't pay all your Vat in one tax period, ask SARS to pay it off in three installments.

In this case, SARS can ask for extra financial information like a statement of your assets and liabilities.

#2: Help SARS with their information gathering

If SARS asks you to attend interviews, comply. For example, SARS wants to meet with you about an audit or even to ask you about others.

That's not all.

You must provide material when SARS asks you to – this shows good faith. And co-operate during a field audit or investigation – this shows SARS you've got nothing to hide.

Well there you have it: Doing these two things will help ensure you avoid Vat penalties. For three additional things you must do to avoid Vat penalties, check out this article.

Overall, we advise you to be honest with your Vat affairs and comply with the Vat Act. This way, you'll never have to worry about the prospect of facing:
 

  • Fixed amount administrative/non-compliance penalties;

  • A percentage based penalty;

  • An understatement penalty; and

  • Criminal penalties.


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



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