XBert Type: Standard
Accounting Software: Xero
Country Restriction: South Africa only
Risk Type: Tax Risk
Business Function: Compliance
Overview
The "Business has incorrect VAT status" XBert flags suppliers you are claiming VAT from who are no longer validly registered for VAT on the South African company register. It helps you avoid claiming input VAT you are not entitled to, which can lead to rejected claims, repayments and penalties from SARS.
What it does
XBert looks at the active supplier contacts in your accounting software that are set up to claim VAT, and that you have actually recorded bills or transactions against. It matches each of these suppliers to their record on the South African company register (CIPC) and checks whether their registration status is still active and valid.
How it works
XBert raises this alert when all of the following are true:
The supplier contact is active in your accounting software.
The supplier is set up with a VAT input tax type, so VAT is being claimed on their bills.
You have recorded real activity against the supplier, such as bills or other transactions.
XBert has matched the supplier to a record on the South African company register.
That register record shows the business is no longer in a valid, active registered state, for example it has been deregistered, is in final deregistration, is in business rescue, or its tax number is invalid.
XBert deliberately ignores suppliers it cannot confidently match to a register record, suppliers that are inactive in your books, suppliers with no recorded transactions, and any alert you have already dismissed. This focuses the alert on suppliers where you are genuinely claiming VAT from a business that should no longer be charging it.
Example / Use Case
Thandi runs the accounts for a Cape Town logistics firm. One of her regular suppliers, Maluti Cleaning Services, has been a VAT-registered vendor for years, so their contact in Xero is set to claim VAT on every bill.
A few months ago Maluti was deregistered for VAT by SARS, but nobody told Thandi. Her team keeps entering bills with VAT and claiming roughly R3,200 of input VAT each month. XBert matches Maluti to the South African company register, sees their registration is no longer valid, and raises this alert.
Thandi confirms the deregistration, asks Maluti for revised invoices without VAT, corrects the affected bills and adjusts her next VAT return, avoiding a SARS reassessment and penalties.
Accounting software
Xero
Which countries it supports
South Africa
Processes
This alert falls under the Compliance business function and is about keeping supplier VAT details accurate. To resolve it:
Review the flagged supplier and the registration details XBert has matched.
Confirm the supplier's current VAT registration status with SARS, for example using the SARS VAT vendor search, or ask the supplier for proof of current registration.
If the supplier is no longer VAT registered, update their contact in your accounting software so VAT is no longer claimed on their bills.
Request revised invoices without VAT from the supplier where needed.
Review any VAT already claimed from this supplier and correct it, for example by adjusting an upcoming or amended VAT return.
Stop claiming VAT from any supplier who is not currently registered for VAT.
Once the supplier's details are corrected, mark the XBert as resolved.
Taking these steps keeps your VAT reporting accurate and compliant, and helps you avoid repayments or penalties from SARS.