Basic VAT Do's and Don'ts
Here is a list of basic rules once you become a VAT vendor:
· Find out which VAT cycle applies to your business and submit your VAT return and payment within 25 days of the end of your cycle.
· Late VAT submissions and payments attract penalties and interest on the amount owed, so don’t leave the work to the last minute.
· Include a VAT line item on all your quotes and invoices, even if the supply is classified as zero-rated (this won’t change the final selling price).
· Make sure the words ‘Tax Invoice’ appear on every invoice.
· Be extra cautious not to inflate your input tax claims to reduce your VAT liability – this is illegal.
· Make sure that the revenue you report in your financial statements matches the revenue you’ve declared on your VAT returns.
· Always submit your VAT returns, even if there’s no VAT due to SARS.
· All your invoices must include your VAT number and that of your customer if they are a registered VAT vendor. You must also include their name and physical address.
· VAT must be charged on any commissions earned or paid.
· If you have an irrecoverable bad debt that’s been written off, you can claim back any VAT already paid to SARS for the invoice in question.