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Vat returns: What to do if you receive a 'Dear Vendor' letter from SARS

by , 17 February 2014
Fact: You'll trigger an audit if you get your Vat return wrong. And as soon as SARS suspects any wrong doing, it'll send you a 'Dear Vendor' letter. Don't panic when you get this letter, do the following instead.

'SARS is constantly on the lookout for Vat evaders and those vendors who may have made mistakes in their Vat returns,' warns the Practical Vat Loose Leaf Service.

When you've made a mistake, SARS will send you a letter as we've mentioned.

Here's what you must do when SARS sends you a letter regarding your Vat returns

The Loose Leaf Service explains that the SARS computer automatically sends out email queries where it detects variances in the output or input tax declared.

So if there's a justifiable reason for the variances, email that information and any applicable documents to SARS as soon as possible.

If you can't find a mistake, you must send SARS your output (sales) and input (purchases) schedules.

SARS needs the following minimum information from you on output tax schedule:

  • Date of supply;
  • Tax invoice number sequence;
  • Total standard rated supplies;
  • Total zero-rated supplies;
  • Total Vat charged;
  • Total Vat adjustments;
  • Total Vat collected.

And it'll require you to submit the following minimum information when it comes to the input schedule:

  • Date of acquisition;
  • Name of supplier;
  • Supplier's Vat Registration Number;
  • Tax invoice total;
  • Zero-rated goods;
  • Total Vat incurred;
  • Total Vat adjustments.

Once you've done that, you must them submit the info in an A4 format via any one of the following three channels:

  • Via e-Filing;
  • Drop it off at your SARS branch; or
  • Use the post.

Here's how to avoid receiving a 'Dear Vendor' letter from SARS

Before you send your VAT201 to SARS, double check for mistakes and establish why there are variances – if any.

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