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Vat issues with SARS? Here's how you can solve them

by , 07 May 2015
Do you diligently pay your Vat each month? But you've still been flagged for a Vat audit?

Here are several things you can do to make sure you comply with the rules set by SARS, and avoid being flagged for a vat audit:

1. Check your Vat returns and make sure they are updated.

In case you don't want to spend your business' capital paying fines to SARS, comply with the regulations and keep your current Vat returns and payments up-todate.

2. Make all payments on time.

As you know, SARS charges Vat interest monthly. Make sure you pay any Vat that's in arrears by the last day of the month. Keep in mind that if you pay the next day, SARS will charge interest for the whole month!

3. SARS will usually remit the penalties

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If your late payment wasn't intentional, SARS will usually remit the penalty. Make sure you pay all outstanding Vat, penalties and interest, so SARS can remit the penalties.

And this is actually more likely to happen if you're usually tax compliant.

Here are three examples where SARS usually won't think your late payment was intentional:
• If there was a strike;
• A big debtor suddenly let you down; or
• Your accountant was ill etc.,

Important: Make sure you can prove the above to SARS!  Note: SARS won't remit the interest!

4. SARS doesn't remit the penalty. What's the solution?

If the government, province or municipality, or any state institution caused the late payment, SARS must remit the penalty. For this you need to hand in a request at a SARS branch for a penalty remission and attach a copy of the bank statement or other supporting documents. In addition to this, contact your local SARS branch to find out what other supporting documents they need. In case they don't remit the penalty, ask SARS to express their reasons in a written note.

Furthermore, you can lodge an objection and if SARS rejects, you can submit an appeal (do this if you know you are entitled to it).

5. Ask SARS to allocate the remission

Note that if SARS remits the penalty, it won't usually refund it, but SARS will show it as 'unallocated payments' on the account statement for that tax year. If this happens, write to SARS 'Accounts Maintenance' at your local office and ask them to allocate the amount to a future
tax period. Then reduce the payment for that tax period accordingly.

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