VAT looks simple until SARS sends a verification request. The most common mistakes we see are entirely avoidable with a ten-minute checklist before you submit.
1. Input VAT on entertainment
Almost never deductible. Client lunches, staff parties, hospitality — these are firmly disallowed. Yet we still find them claimed in roughly one in three first-time client reviews.
Check: filter your input VAT for any GL accounts containing 'entertainment', 'staff function', 'client lunch'. Reverse anything questionable.
2. Mixed-use vehicles and rentals
If an asset is used partly for business and partly for private (or for both taxable and exempt supplies), you must apportion input VAT. People consistently claim 100% on assets that aren't 100% business.
3. Zero-rated vs. exempt
These are not the same. Zero-rated supplies entitle you to claim input VAT; exempt supplies don't. Treating them interchangeably distorts both your output liability and your input claim.
4. Imports and customs VAT timing
You can only claim import VAT in the period in which it was paid AND you have the customs release notification. Claiming on the invoice date is one of the most common timing errors we see.
5. Invoice format
SARS is specific about what a valid tax invoice contains. Missing VAT numbers, abbreviated supplier names, or invoices over R5 000 missing the buyer details — all grounds for disallowance.
- Supplier name, address and VAT number
- 'Tax Invoice' clearly displayed
- Sequential invoice number and date
- Buyer details (for invoices over R5 000)
- Description, quantity, VAT amount, and total
A ten-minute checklist before submission saves a six-month conversation with SARS afterwards.
When to disclose voluntarily
If you find a historic error, file a Voluntary Disclosure Programme (VDP) application before SARS spots it. Penalties are dramatically lower — sometimes waived entirely.
