Inland Revenue Educates Registered Persons on avoiding simple VAT errors
The Tax Administration understands that sometimes VAT registered persons can make errors when calculating and reporting their VAT even with the best intentions of getting it right.
The Administration wants to work with businesses to help them get their VAT returns right from the start the first time so not only they can save time and money but it ensures that the right amount of VAT is paid and also any refund due is correct and processed quickly.
The Administration wants to make the VAT regime as easy as possible that allows businesses more time focusing on their customers and growing their businesses.
To help our customers (VAT Registered persons) avoid making simple mistakes that is quite common when completing their VAT returns, here are some helpful tips:
When making payments for your legitimate business expenses, you must make sure that a proper tax invoice is requested and provided by your supplier;
- Check that the expenses and income are accounted for using the right accounting basis elected to for the corresponding period;
- Remember not to claim VAT on expenses that are exempted and/or outside the scope of VAT regime such as staff wages and private expenses;
- Before lodging your VAT return, cross check that the amount calculated on your VAT return equals to what you expect to pay or receive as refund;
- Maintain a good record keeping practice;
- Know your VAT return due dates, file your returns and make payments on and/or before the approved due date.
The Tax Administration will apply full force of law where it is evident that the under declaring and/or over claiming of VAT is done intentionally.
Since the VAT regime operates on a self-assessment basis, unless there is evidence of careleness, recklessness or intentional disregard of the VAT Act No. 12 1998 [CAP 247]. The Administration accepts that the VAT registered persons are trying to be honest in their VAT obligations and that the information provided is as accurate as possible.