DEALING WITH A VAT AUDIT

Article by: Fourways Accountant - ANNJA LOUCA

We understand that the thought of a VAT audit can be daunting, but it needn’t be. With the right preparation and a thorough understanding of the process, it can be a smooth and stress-free experience.

Why is a VAT Audit Aonducted?

In South Africa, the South African Revenue Service (SARS) may select a business for a VAT audit for a variety of reasons.

These can include discrepancies in VAT returns, significant changes in VAT amounts, or simply random selection. It is essential to be prepared at all times to ensure compliance and avoid any potential issues.

During a VAT audit, SARS will review your VAT returns and supporting documentation to ensure that the correct amount of VAT has been declared and paid.

What Does the Audit Involve?

The audit process typically involves the following steps:

• Notification: SARS will notify you of the audit and request specific documents and information.
• Document Submission: You will need to submit the requested documents within the specified timeframe.
• Review: SARS will review the submitted documents and may request additional information or clarification.
• Outcome: SARS will provide the audit outcome, which could result in a refund, additional payment, or no changes.

How We Ensure a Smooth VAT Audit

To ensure a smooth VAT audit, we take several pre-emptive steps as your accountants:

Comprehensive Documentation - we make sure all necessary documents are accurate, prepared, and easily accessible.

This includes:

• Detailed explanation of the nature of your business, including payment arrangements with customers and suppliers, and financing arrangements.
• Output tax and Input tax VAT Control accounts/schedules.
• Top 5 by Rand value of tax invoices claimed and issued.
• Latest trial balance.
• Lease Agreement and Landlord contact details or Proof of ownership of premises.
• Municipal utility account in your name.
• Current period Debtors and Creditors ledgers or accounts.
• A written explanation for any significant increase in purchases/input being substantially higher than the income declared in the tax period.
• Bank statements for the tax period of all enterprise bank accounts.

Utilising Xero

For clients using Xero, we ensure that all bills are uploaded, and verify the top value invoices and input tax claimed (expense claims) transactions before submitting the VAT to SARS. This allows us to correct any errors before submission, reducing the risk of issues during the audit.

Preparation and Verification

By verifying and correcting any discrepancies before submission, we make the VAT audit less stressful. This ensures there are no nasty surprises, and any potential errors are spotted and addressed beforehand.

By staying prepared and maintaining comprehensive documentation, we can ensure that the VAT audit process is smooth and efficient. If you have any questions or need further assistance, please do not hesitate to reach out to us.

For more information, please visit our website www.anlo.co.za or give us a call on 011 6581324