The fundamental rules of VAT submission.
When it comes to submitting your VAT return, it is fundamental that you’ve covered all your bases correctly.
The last thing you need and want is having an audit triggered by SARS because you put a zero in the wrong place on your VAT return.
Says chartered accounting and tax advisory firm Octagon Chartered Accounts: “There are three fundamental rules that you should follow in order to ensure that your VAT return is submitted correctly.”
Rule #1: Make sure you have tax invoices for all your input tax claims
The tax invoice is the most important document in the whole VAT chain. Make sure you have tax invoices for your input tax claims, and more importantly, make sure they’re valid.
Rule #2: Fill in the correct blocks
Read the description of each block and make sure you fill in the correct ones. For example, don’t put zero rates (meant for block 2) in at exemptions (block 3).
“Also, don’t use other blocks you’ve never used before. By filling in the incorrect blocks, or swopping blocks every tax period, you only put yourself at risk for a SARS audit. And I’m talking about the kind that could result in SARS grabbing money out of your business bank account,” explains Octagon.
SARS is helping itself to bank accounts all over the country because of one VAT pop-up letter.
Did you ignore the VAT pop-up letter that appeared immediately after you submitted your VAT return?
You’ve just given SARS licence to grab money out of your bank account!
Rule #3: If you have a refund – check up on it to make sure SARS gives it to you within 21 business days
You read right! If you claim a refund, and you don’t owe SARS money on any other taxes, then SARS must refund you within 21 working days. This includes doing and finalising their audit.
“Just make sure you and your documents are available within those 21 working days. So, when you submit your VAT return, start counting the days. And if you’ve done your part, and the refund isn’t in your bank account on working day number 22, then phone the call centre, and tell them you demand your interest.
“You’ll probably get some sort of stunned silence on the other end, but at least you’ll get a case number out of them. Then use that case number in a letter to SARS demanding your interest,” advises Octagon.
Are there any reasons why a refund may be delayed?
Yes, the 21 business days may be suspended. In this case, no interest will be payable after the 21 days has passed. According to SARS, a refund may be subjected to the finalisation of the verification, inspection or audit, in which case the 21 business days will be suspended until the audit is finalised.
Additionally, SARS may withhold a refund for a number of other reasons, such as not having the correct banking details, or still awaiting all VAT returns, or not having other taxes paid.
What happens if my refund is not authorised?
“If SARS decides not to authorise your refund then you can object or appeal its decision,” says Octagon. This, however, must be done in writing and the alternative dispute resolution form must be completed (you’ll find this on the SARS website) and sent back to SARS, along with the reason for your object and supporting documentation. This must be done within 30 business days from the date of the assessment.
If you need help submitting your tax return or appeal a decision by SARS, then get in touch with us today, we are more than happy to provide sound tax advice and guidance.