The VAT Refund Concept
Generate additional Cash and Profits
The VAT Refund concept offers clients a risk free service to recover unclaimed VAT by using specialised software and a unique methodology, which has resulted in our clients saving many hundreds of thousands of Rands and in numerous cases, many millions of Rands.
Most companies believe that they follow the various tax laws correctly but certainly in the case of VAT, numerous accounting errors which are made have resulted in companies losing large amounts of VAT by remaining unclaimed each year. The task of processing entries is often left to employees who are not always suitably trained or qualified to handle the complexities of certain VAT issues. Also, the changing legislation makes it difficult to remain up to date.
In many cases, errors are difficult to identify and as a result, companies effectively overpay VAT by not claiming all VAT which is legally due to them. The effect of this is to increase the operating expenses of the company as the unclaimed VAT simply becomes an expense to the business.
SARS is aware that companies make numerous errors in claiming VAT. However, SARS does not have to notify companies of any errors and are only obliged to abide by a gazetted prescription period of 5 years, during which time companies are afforded the opportunity to reclaim any VAT due. VAT Refund identifies amounts which have been unclaimed to ensure that companies recover the full amount of VAT due.
VAT Refund is a company of highly qualified personnel who have developed proprietary Data Mining software which enables them to identify unclaimed Input tax. The expertise, knowledge and experience gained from providing these Data Mining services to a wide range of clients, allows VAT Refund to perform an efficient and risk free analysis for companies.
VAT Refund is able to quickly identify areas for detailed analysis, a process that could take an internal auditor or an appointed employee a considerable amount of time. VAT Refund gets results as it focuses on the desired outcome, unaffected by the day to day operational requirements of the business. In short, today’s competitive environment requires companies to look to the future whilst VAT Refund looks at the past.
Reasons for Errors
- FD often under so much pressure in general and cannot check VAT in detail
- New accounting systems and procedures
- Numerous staff changes
- Changing legislation
- High volumes of transactions
- Uncertainty over what constitutes a claimable VAT transaction
- Inaccurate data capture and lack of knowledge
- Dealing with numerous creditors
- Complexity of supplier agreements
- Miscommunication between purchasing and accounting departments
No Benefit – No Charge
Nearly every company that has employed the services of VAT Refund has initially been sceptical about the ability to identify unclaimed VAT. In particular, most finance departments believe that all of the necessary systems and processes are in place to ensure that a full recovery is made. However, to date every client, including large multi-nationals and JSE Listed Companies, has recovered unclaimed amounts ranging from R100 000 to several million Rand. VAT Refund has a track record of 100% success in finding VAT savings for its clients over the past 10 years.
Errors differ from company to company and there is no simple blueprint solution but VAT Refund’s No Benefit – No Charge policy, is the guarantee of a risk free service.
Confirm that internal controls are in place
VAT Refund is also able to identify weaknesses in internal systems. VAT Refund is there to add value and profit to organisations. At worst, companies will receive a free compliance assessment of input tax controls and processes. All it requires is an open-minded approach to the potential profit opportunity.