XBert Type: Standard
Accounting Software: Xero
Country Restriction: South Africa only
Risk Type: Tax Risk
Business Function: Purchases
Overview
This XBert checks bills where VAT has been claimed but the attached tax invoice does not appear to contain a supplier VAT number. South African Revenue Service (SARS) rules require a valid tax invoice with a VAT number before you can claim VAT on a purchase. If the supporting document is missing that detail, the VAT claim may not stand up to a SARS review.
What it does
XBert looks at supplier bills in Xero that have VAT claimed on them and a document attached. When XBert has not been able to capture the supplier's VAT registration number from that attachment, it raises this XBert so you can check that the supporting document is a valid tax invoice showing the supplier's VAT number.
How it works
XBert raises this alert when all of the following are true for a bill:
The bill is marked as Submitted, Authorised or Paid.
It is a South African (ZAR) bill dated within the last 12 months.
The amount before VAT is more than R500, and a VAT amount has been claimed.
A document is attached to the bill, but XBert has not captured a supplier VAT number from it.
XBert is careful to avoid raising this on the wrong document. If the only things attached to the bill are clearly not a supplier tax invoice — for example a receipt, an account statement or a business card — the alert is not raised, because those documents are not expected to carry the supplier's VAT number. The alert is still raised when an attachment has not yet been read or recognised, as that is exactly the case where a genuine tax invoice may be missing its VAT number.
Example/Use Case
Thandi runs a small catering company in Cape Town. She enters a bill in Xero from a supplier, Harbour Packaging, for R2,300 plus R345 VAT, and attaches the scanned invoice. The scan is faint, so XBert is unable to capture the supplier's VAT number from it. XBert raises this alert against the bill. Thandi asks Harbour Packaging for a clear, compliant tax invoice showing their VAT number. If she could not obtain one, claiming the R345 VAT would put her at risk of having to repay it if SARS reviewed her records.
Accounting software
Xero only.
Which countries it supports
South Africa only.
Processes
This XBert sits under the Compliance area and helps you keep your VAT claims supported by valid tax invoices. To resolve it:
Open the flagged bill and check the attached document for the supplier's VAT registration number.
If the number is present but the scan is unclear, replace the attachment with a clear copy of the tax invoice.
If the document has no VAT number, ask the supplier for a compliant tax invoice that shows their VAT number.
If the supplier is not VAT registered and the VAT was claimed in error, correct the VAT treatment on the bill.
Once the supporting document is correct, mark the XBert as resolved.