You've probably seen all the news around SARS and Vat refunds more specifically, that there seem to be serious delays in paying these out. SARS has stated that it's making improvements to its systems to better manage the refunds process (i.e. to prevent abuse by taxpayers as well as by SARS). So, as part of this upgrade, SARS has introduced a few changes to the VAT201 return.

Let's look at the five new changes introduced recently by SARS on the VAT201 declaration.

1. Request for demographic information
This updated VAT201 form has two new changes to it you need to fill in the correct demographic information and include the declarant's signature too (there's a separate block on the first page of the VAT201 form that must be completed).

Tip: The demographic information is the name, job description and contact details of the person filling in the Vat return.

Important: From May 2011 you must request your VAT201 Declaration form from SARS directly. Prior to May 2011 SARS either posted your Return to you, or you could obtain one at their client centers.

How can you request your return? You can use any one of these channels to request your form:

• e-Filing;
• Your SARS branch;
• Phoning the SARS Contact Centre on 0800 00 7277;
• Posting a request to SARS.

2. 10-digit Payment Reference Number (PRN)
When you request your VAT201 Declaration form from SARS, it will automatically pre-print a 10-digit payment reference number on it. This PRN links the actual payment you made to the declared amount on your VAT201 for a specific period. Hopefully there won't be any misallocation of payments on your account anymore!

Tip: Keep this number safe, for when you need to query something from SARS!

3. The new and improved Request for Correction Functionality
Good news! You're now allowed to make corrections to your VAT201 Declarations for tax periods falling within the last five years!

Important: When you want to make a correction, you will be required to complete the VAT201 Declaration again, and not only the parts that have been updated. You can request the declaration from SARS using the same channels as in number 1 above.

When SARS receives your request for a declaration, it will check to see if you actually did submit a return or not, and if you did, it will automatically pre-populate the VAT201 Declaration (that is, put in the figures you originally declared!).

When you receive the VAT201 Declaration back from SARS and you've made your changes, you should submit it using any one of these three channels:

1. e-Filing;
2. Post it to SARS; 3 channels to use to submit your VAT201 form
3. Or drop it off at your SARS branch.

Caution: With the new and improved Vat system SARS is implementing, it now has the ability to revise the VAT201 Declarations for tax periods which may be under audit. Vendors will be informed of any changes with a VAT217 Notification.

A VAT217 is a notice of assessment, and it sets out the following columns:

• Previous which shows the figures originally given in to SARS
• Now which shows the changed or revised figures
• Difference which shows the difference, in amount, of the figures

However if you want to amend a Vat return you already submitted to SARS, you won't be able to make any changes to input tax. If you forgot to claim something, you will have to claim it in your next Vat return. So, from the SARS info, it seems that back-changes will only be permitted to output tax.

Caution: Remember that if you change output tax, it will trigger an alarm bell at SARS, and you may become subject to an audit.

4. The new Risk profiling System
To minimise fraud SARS is implementing the new risk profiling system on all VAT201 Declarations that are being submitted! Should SARS pick up something it's not happy about, and classify it as a risk, the VAT201 Declaration for that specific period will be subject to a review or audit.

Should your VAT201 Declaration be selected for a review or audit, SARS will notify you in writing of this and request relevant documentation from you including output and input tax schedules (Where're the days the SARS auditors came to visit you?). Should you require more information on what to do when you're being Vat audited by SARS please refer to chapter A05 in your Loose Leaf.

5. 1 July 2011- all manual debit order payments are going to be stopped!
From 1 July 2011, SARS has stopped all manual debit order arrangements currently registered with it for payments of VAT 201 Declarations.

SARS is using digital channels for Vat submissions more and more. In fact, if you e-File your return, there's an easy link (just a click) to effect payment. Really, given all the errors made on vendors accounts these days, I strongly recommend you to register for e-Filing.

Important: The minute you register for e-filing to submit your Vat, SARS will automatically cancel any debit order arrangements you may have in place to pay your Vat.

Getting the new form isn't the hard part. But knowing how to complete it, is.

Did you know that you're working for SARS?

As a Vat vendor, you're an unofficial SARS agent! Because Vat is a self-assessment tax system.

Do you have enough practical knowledge of Vat to enable you to levy the tax, subtract the correct amount of input tax and pay over the difference to SARS? Or claim a refund if you qualify for one?

I'm not trying to sound melodramatic but the VAT201 form is a legally binding document. One mistake on that form could paint you as a criminal, in the eyes of SARS.

Before you sign your way into trouble….

Consult The Practical Vat Loose Leaf, to get the best tips, advice and step-by-step instructions. You'll never be baffled by Vat again!

Try our complete Vat Advisory Service risk-free for 14-days. As part of this service you'll receive the Practical Vat Loose Leaf, three Bonus Reports, Regular updates, the daily Tax Bulletin, Online access to past Vat Updates and access to the Vat Helpdesk.

What else you'll discover in the Practical Vat Loose Leaf, to help you take control of your Vat:

Checklists, to save you time and ensure you don't miss a thing!

• 5 exceptions to the basic fringe benefits rule
• 6 vehicles that SARS opens the doors to
• 4 critical facts you must know about Vat when you receive an insurance settlement
• Documents to attach to your Vat101 application
• 6 basic rules about travel and Vat

 
Vat advice you can put into practice today:

• 24 activities that qualify for the diesel refund scheme
• How to claim every input tax credit possible
• 3 general rules about the Vat201 return
• How to complete your Vat return
• 4 important documents to keep for export between branches