startups Article / Blog :
How the launch of three new VAT tools will assist SMEs

how the launch of three new vat tools will assist smes

With the aim to resolve the tedious and traditionally costly process of processing VAT (value-added tax) for businesses, global cloud accounting software provider, Xero has announced the launch of three new VAT cloud tools.

The newly developed tools aim to transform how SMEs manage VAT and will allow businesses to prepare, submit, and store VAT returns through Xero platform and to the South Africa Reserve Bank (SARS).

The new cloud service tools include VAT Return Form, VAT Late Claims functionality, and eFiling.

In an official press release, Colin Timmis, Country Manager South Africa at Xero explains that the new VAT cloud tools will assist SMEs and contribute to the digital transformation in the tax industry.

This is a game-changer for accountants and small businesses in South Africa and will give them one simple workflow. Weve worked closely with tax bodies in other markets - like the UK and Australia - to support their drive towards digitisation in the tax industry. These new tools will be a much-needed boost for digitisation in SA, in line with SARS agenda and that of the wider government. We need to make the tax process easier so businesses dont damage their chance of survival with unnecessary penalties or interest. This innovation, along with other Xero tools like data capture tool Hubdoc, will help future-proof businesses.

The cloud tools have been designed to improve systems for SMEs and advisors by assisting in the increase of efficiency, reducing errors, improving accuracy, and allowing businesses to gain more control over finances.

Assisting SMEs
Jeanne Viljoen, Project Director for Practices at the South African Institute of Chartered Accountants (SAICA) explains that the cloud tools reduce admin and transforms the way businesses operate.

Making tax simpler is key in reducing costs associated with compliance. These VAT tools not only make it easier for businesses to be compliant but also save time. This allows business owners to focus on their business rather than the admin. Embracing technology streamlines processes and creates a collaborative working arrangement between businesses, accounting firms, and government.

Xero claims to have 2.45-million subscribers globally and provides small business owners and its accountants the opportunity to access real-time financial data at any time on any device.

Shahied Daniels, Chief Executive of the South African Institute of Professional Accountants (SAIPA) comments on the importance of the cloud tools for accountants to accelerate digitisation in not only SAs tax industry but also the general economy.

"This is a great step forward in the wider industry's mission to set Professional Accountants up for the future and with the right tools to embrace 4IR. Professional Accountants have an essential role to play in the future of SA's economy, and digitisation of processes like VAT will be vital in enabling this."

Available cloud tools
The eFiling cloud tool with SARS is intended to launch in the first quarter of 2021 as it is in beta trial stages however, the VAT Return and Late Claims are accessible now.

The eFiling tool will give users the opportunity to file VAT201 forms electronically to SARS via the Xero platform. Once submitted, the forms are processed by SARS and consumers will be able to check their status the day after submission.

The VAT201 return form has been created in line with the requirements of the SARS version. Users are able to view the list of transactions that make up each return which will enable them to transcribe into journals if necessary.

Accountants and SMEs are able to include transactions from the previous tax period in the current tax period through the Late Claims VAT tool. The tool also eliminates users adjusting accounts or tracking invoices to claim by ensuring the invoice appears in the accurate reporting period and gets added to the next VAT return.

Mike Anderson, founder, and CEO of The National Small Business Chamber (NSBC) comments that the VAT cloud tools are accelerating the digitisation of the tax industry.

"The small business community is already facing so many challenges. As they continue to weather the storm, they need time to focus on their recovery. It's great to see this kind of innovation helping to automate and digitise processes like VAT - keeping SMEs compliant and giving them time back to focus on the most important things. We hope to see more areas of small business going this way in the future.

Xero provides an ecosystem that consists of more than 800 third-party apps and over 200 connections to banks and various financial partners.

The Xero VAT tools are available to accountants and bookkeepers at no additional cost via the Xero Partner Programme.

N