XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks
Country Restriction: ZA only
Risk Type: Tax Risk
Business Function: Purchases
Overview
The “Payment to Supplier Not Registered for VAT” XBert detects payments made to suppliers who are not actively registered for VAT on the SARS database. This alert helps you avoid claiming VAT credits that you are not entitled to, protecting your business from tax compliance risks and financial loss.
What it does
XBert identifies instances where your business has made payments to suppliers who are inactive for VAT purposes, but where VAT was included in the payment or bank transaction. It flags cases where you have paid VAT on bills or bank spend items, even though the supplier is not a registered VAT vendor.
How it works
XBert analyses:
Suppliers who are matched to SARS, but marked as not VAT registered
Supplier bill payments and bank transactions made within the past year
Payments where VAT was included in the transaction, and the total VAT amount is R10 or more
If any suppliers meet this criteria and payments have been made to them with VAT included, XBert generates an alert, calculating both the total VAT paid and total spend.
Example / Use Case
Your business has worked with a cleaning supplier for years. In the past year, they deregistered for VAT, but you weren’t aware. You continue paying their invoices, which still include VAT. When preparing your VAT return, you claim back these amounts. Later, SARS audits your return and disallows the VAT credits, as the supplier is not VAT registered. You must now repay the VAT and may need to recover it from the supplier, causing financial and administrative stress.
Accounting software
Xero, MYOB, QuickBooks
Which countries it supports
South Africa only
Processes
This XBert is part of the Purchases & Payables (AP) process and is aimed at ensuring correct VAT treatment of supplier payments.
To resolve this alert:
Check the VAT registration status of the supplier via the SARS VAT Vendor Search
Update the supplier’s tax settings in your accounting software if they are no longer VAT registered
Request revised invoices from the supplier that exclude VAT, if applicable
Update the related bills and transactions to remove VAT where it was incorrectly applied
Ensure no VAT credits are claimed on your return for this supplier unless they are VAT registered
By keeping your supplier records up to date and verifying VAT registration, you can reduce the risk of incorrect VAT claims and avoid unnecessary payments to SARS.