Easy VAT Calculations in 3 steps!
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Are you aware that thanks to the self-assessment Vat system, you're an unofficial SARS agent?
That's why you must
Get your basic VAT calculations right the first time!
No matter how great your turnover, or how confusing your mix of exempt, deemed, notional or standard-rated supplies, there are still three basic steps to determine your Vat liability:
Follow this process if you've completed your Vat return but can't afford to pay SARS
1. Submit your Vat return
Just because you can't afford to pay SARS doesn't mean you mustn't submit your Vat return
. Even if you know you can't pay, submit your Vat return.
The Practical Vat Loose Leaf Service
warns that, 'in terms of Section 58(d) of the Vat Act
, if you don't submit your returns on time, you're guilty of an offence and could face up to R80 000 fine or two years in jail.'
2. Set out the details of your circumstances and pay your local SARS branch a visit
Remember the SARS branch where you did your Vat registration? Go to its client service centre and explain your situation to the officials.
When you meet with SARS officials, you must explain your situation verbally and in writing.
So before you go to SARS, prepare a proposal, set out your circumstances in writing and explain why you can't pay the Vat.
In addition to this, prepare a statement of your income and expenditure and an up-to-date statement of your assets and liabilities. Take these documents with when you visit SARS.
So what happens after your consultation with SARS?
If you've been a good Vat vendor who always makes Vat payments on time, SARS will let you settle your Vat account over a period of time. This period depends on your circumstances.
But if, for example, you have a bad record and have been guilty of evasion, SARS won't approve your proposal. And you'll face harsh penalties.
This just goes to show the importance of always making timely Vat payments. It could be your lifeline on a rainy day.
PS: For more information on completing your Vat return and other Vat matters check out the Practical Vat Loose Leaf Service.