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WARNING: It's a criminal offence not to keep proper Vat records!

by , 10 September 2014
Many Vat vendors take the obligation to keep Vat records lightly.

Not only is this shocking, but it's just careless and shows that these vendors are flirting with danger.

You see, it's a criminal offence not to keep proper Vat records.

Keep reading to find out just how serious this is so you can avoid severe Vat penalties and interest from SARS.


Don't take your record keeping obligations lightly – failing to keep Vat records is an offence
 

If you fail to keep proper Vat records, you'll be caught out by a SARS audit when you can't substantiate your claims. This means you'll have to repay any refunds you received that you can't prove.

There are strict penalties and interest to add to this too. But that's the least of your worries.

In terms of Section 58(f) of the Vat Act, failing to comply with the statutory requirements for record keeping is punishable by a prison sentence of up to two years or a fine.

As you can see, failing to keep proper Vat records is out of the question.
 

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Keeping your Vat records must form an integral part of your Vat management strategy
 

As part of your Vat management strategy, record keeping plays a pivotal role.

'Your records are the evidentiary proof you need to substantiate your claims and returns to SARS,' says the Practical Vat Loose Leaf Service.

The Loose Leaf Service adds that when you're deciding what to keep, bear in mind that whatever you keep must serve a defined purpose, to allow SARS auditors to:
 

  • Establish the nature, time and value of all taxable supplies, and

  • Reconcile your accounting records with the Vat returns you submitted.

 
Also keep in mind that your Vat records must be available for inspection by SARS at any reasonable time during the period of prescription, which is generally five years.

The bottom line: You must keep proper Vat records – failure to do so is a serious offence.


Find out how to calculate Vat efficiently and take advantage of little known, legal, Vat saving strategies
 



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