XBert Type: Standard
Accounting Software: Xero
Country Restriction: South Africa only
Risk Type: Tax Risk
Business Function: Compliance
Overview
The “Non VAT Account Has VAT Against It” XBert finds accounts that are treated as non-VAT (such as zero-rated or exempt) but still have VAT recorded against them. Catching this early keeps your VAT reporting accurate and helps you stay aligned with South African Revenue Service (SARS) rules.
What it does
This XBert reviews recent general ledger activity and looks for accounts that should not attract VAT — for example accounts coded as No VAT, Zero Rated, Exempt Expenses, Exempt Income, or EC Acquisitions. It then checks whether VAT has actually been posted to those accounts. Where it finds VAT on an account that is meant to be non-VAT, it flags the mismatch so you can review it.
How it works
The XBert compares each account's expected VAT treatment with the VAT actually recorded against it over the last three months. It groups the activity by account and by month, and only raises an XBert when the VAT on a non-VAT account adds up to more than R5 for that month. It looks at real, posted transactions on live bills and invoices — voided or deleted documents are ignored. It is also smart enough to skip cases where VAT lines simply cancel each other out within the same document (for example a charge and an equal-and-opposite reversal), because in that case there is no real VAT left on the account. Bank accounts, your accounts payable and accounts receivable control accounts, and built-in system accounts are not included.
Example / Use Case
Thandi sets up a new revenue account in Xero and codes it as Zero Rated, intending it for export sales. A few weeks later, Pieter raises several standard local invoices against that same account and applies VAT at 15% on each. Because the account is set as zero-rated, the figures don't line up — VAT of R612 has been posted to an account that is meant to carry no VAT. This XBert flags the account so the team can check whether the sales were genuinely zero-rated or whether they should have used a standard-rated account. Left unnoticed, this kind of mismatch can lead to an incorrect VAT return, a SARS query, and the business having to cover the shortfall itself.
Accounting software
Xero
Which countries it supports
South Africa only
Processes
This XBert falls under Compliance, specifically your VAT treatment.
To resolve it:
Open the flagged account and review the recent transactions that carry VAT.
Decide whether the account is set up correctly — does it have the right default tax rate for how it is actually used (for example standard-rated 15% VAT versus zero-rated or exempt)?
Check whether the VAT rate was overridden by mistake on individual invoices, bills, or payments.
Correct the entries by re-coding the transactions to the right account or applying the correct VAT treatment, so the account and its activity match.
If a different account would be more appropriate for these transactions, move them across.
Once the account and its transactions are corrected, mark the XBert as resolved.
Keeping accounts and their VAT treatment consistent helps you submit an accurate VAT return and avoid costly adjustments during a SARS audit.