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Accounting,  VAT

How does a VAT audit work??

If you have ever had a VAT audit and wondered what it entails. VAT returns should be submitted every 2 months. And every month for companies with a turnover of more than R50m a year.

SARS will notify you if your VAT201 return has been selected for a VAT audit. This notification is done as soon as the return is submitted.

The next step is then to submit a detailed calculation of your VAT amount payable to SARS. They will then go through this information. If they need more information, they will give you a call to request it. This is usually done to verify that the expenses claimed are valid VAT invoices.

Unfortunately there are cases where expenses are not allowed. SARS will then raise an additional assessment(called a VAT217 form) on the VAT account. Further action is then required if you feel that these expenses should have been allowed.

VAT returns are usually selected for audit if it amounts to a refund. Or when the input VAT on an asset is claimed. It is important to indicate assets bought under capital goods and not under purchases.

vat audit

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