VDP Isn’t a Get-Out-of-Jail Card Unless You Get it Right
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Because when SARS smells a rat, it’s already too late.
Most clients don’t set out to deceive SARS. But mistakes happen. Income slips through the cracks, contractors get misclassified, VAT returns are filed late, or not at all. And when SARS starts sniffing around, the panic sets in.
That’s where the Voluntary Disclosure Programme (VDP) comes in. It’s not a free pass, but it is a legal escape hatch if you act early. Done right, it can protect your clients from penalties, prosecution, and compliance chaos. Done wrong, and you could trigger a storm.
Below we provide a guide to understanding VDP, focusing on areas that are often problematic and misunderstood. Use this to save your clients and build your own reputation as the accountant who keeps businesses out of SARS’ firing line.
What Accountants Still Get Wrong
Even after our previous VDP article, we still get accountants asking the same tough questions:
Can I apply if SARS already asked a question about the issue?
Will VDP work if my disclosure results in a refund?
What does "voluntary" mean?
Let’s clear that up.
VDP only applies if SARS hasn’t started sniffing. If there's already an audit or investigation, you’re likely too late. However, a senior SARS official can allow it if they believe your disclosure wasn’t related to what they were already looking into, but that’s rare.
No refunds allowed. If your disclosure results in SARS owing your client money, the application is dead in the water.
Voluntary means BEFORE you get caught. If SARS already suspects something, your window is closing fast. That’s why timing is everything.
Step-by-Step: Applying for VDP
If you haven’t submitted a VDP application yet, it can feel overwhelming. The good news is that SARS has issued a step-by-step guide on VDP that demonstrates the process of application on efiling. The steps are simple when broken down:
Get the Facts Straight
Start by collecting key documents: bank and investment statements, bond accounts, tax certificates, and records of asset sales or income sources. These help identify whether income or gains were underreported.
Next, check if the income was fully disclosed to SARS. For foreign assets or funds, confirm whether Reserve Bank approval was obtained.
If everything was properly declared and authorised, VDP may not be necessary. But if you find non-disclosure or unauthorised offshore transfers, it's time to consider the appropriate regularisation route, likely starting with VDP.
Check Eligibility
📌Make sure there’s no active audit or investigation relating to the issue.
📌Confirm that the disclosure won’t result in a refund.
📌Confirm that your client hasn’t applied for VDP for the same issue in the last 5 years.
Consult the SARS VDP Policy Guide for more information.
Log into eFiling
You must be registered for SARS eFiling and you can find the VDP01 form there. No paper submissions are allowed unless you go to a branch.
🧩Log into eFiling and go to the relevant taxpayers profile. Navigate to: Returns/Voluntary Disclosure/New Application.
🧩Select whether the relevant tax type the application is for. This may be for Income tax, Employees tax, VAT or Other taxes.
After selecting the relevant tax type for which the disclosure is made you will be directed to the Voluntary Disclosure Work Page where you will see the VDP01 Form.
Complete the VDP01 Form
Be detailed and transparent. Include:
📌The full nature of the default: Explain what happened, when, why it happened, and why it wasn’t declared earlier. Be specific.
📌Tax types affected: Income tax, VAT, PAYE, etc. Include reference numbers and the periods involved.
📌Amounts disclosed: Break down the calculations clearly.
📌Type of default: Such as understatement of income, over-claimed expenses, or unfiled returns.
📌Description of the default: This is your narrative. Tell SARS the full story clearly and factually.
A weak or vague disclosure can lead to rejection. Treat this as a legal affidavit.
Attach Supporting Docs
While the guide allows for submission without these, SARS makes it clear: the more complete and transparent your documentation, the better your chances of approval. Include:
✅ Detailed explanation of the default
✅ Proof of eligibility (e.g., no audit notifications)
✅ Spreadsheets and working papers
✅ Tax calculations
✅ Bank statements (especially for foreign income)
✅ Source codes and income breakdowns
✅ Emails or other supporting correspondence
✅ Power of attorney (if submitted by a representative)
✅ Any prior SARS letters relevant to the issue.
📌NB! Take care to ensure that the supporting documents are in line with your description. For example, if you claim that your client overclaimed expenses, only include supporting documents relating to this. Make a list of your documents and reference to them from the description of the default to ensure clarity.
SARS Review
SARS will assess your application. They may ask for more info or schedule a meeting.
Sign the Agreement
If accepted, SARS will issue a VDP agreement. This legally binding contract outlines the terms, amounts due, and any conditions.
Pay Up
Clients must settle the tax and interest (penalties are often waived). Late or missed payments? SARS can cancel everything and prosecute.
What VDP Will and Won’t Do
✅ What VDP does:
Wipes out criminal liability for the disclosed defaults
Waives understatement penalties (100%)
Waives admin non-compliance penalties (100%)
Allows funds to be repatriated to SA "clean"
❌What VDP won’t do:
Refund you
Cover you if SARS already knows
Waive interest
Work if the info is incomplete or misleading
The VDP is generous, but only if you follow the rules.
High-Risk Scenarios You Should Look Out For
Want to spot when VDP could save your client’s bacon? Here are common scenarios:
Backdated VAT Registration
A business crossed the R1m VAT threshold in 2023 but only applied for registration in 2025. SARS will backdate the liability. Use VDP within 21 days of registration to avoid penalties and prosecution. How? Read more about it in our previous article: How to Clean Up Tax Messes - Your Guide to VDP
Undeclared Offshore Income
Thanks to Common Reporting Standards (CRS), SARS receives foreign income data annually. Undisclosed foreign interest, rental income, capital gains, trust distributions, or offshore salaries are all high-risk areas for VDP.
PAYE Errors
If you find misclassified contractors, fringe benefits not declared, UIF missed VDP helps you fix it cleanly. If discovered by SARS, this can lead to a minefield of penalties.
Crypto Gains
Clients who traded or held crypto and never disclosed it? With digital asset scrutiny rising, VDP is one of the few shields left.
Why This is a Billable Advisory Service
VDP isn’t just a helpful gesture, it’s a high-value service. If you are a tax practitioner, you can offer this service to all your clients. You’re not just filing forms. You’re:
Identifying risks
Navigating a legal process
Drafting disclosures
Structuring payments
Protecting your client’s reputation.
Frame it like that. Charge for it. You’re the expert keeping clients out of trouble.
Final Word: VDP is About Trust, Timing and Transparency
If you have clients hiding skeletons don’t wait for SARS to come knocking. Help them come clean while they still can. VDP won’t be around forever, and it only works if you act first.
🔴 LIVE: 2026 Budget Speech Viewing & Expert Analysis
Understand the Budget as it happens. Know what to do next.
On 25 February 2026, South Africa’s National Budget Speech will set the tone for tax, compliance, and economic decision-making in the year ahead. CIBA invites you to a live Budget Speech Viewing & Expert Analysis Event, designed specifically for finance professionals who cannot afford to “wait and see” what it means.
Join us for a real-time viewing of the Budget Speech, streamed directly from Parliament, with live expert commentary translating policy announcements into clear, practical implications for your practice and your clients.
You will hear expert insights from Johan Heydenrych, Ettiene Retief, and Dr Frederich Kirst, as the Budget unfolds — not weeks later.
Whether you advise clients, manage tax risk, or lead financial decisions, this session helps you move from policy to action immediately. The event concludes with a cocktail networking session for in-person attendees.
📍 Venue: CSIR International Convention Centre, Pretoria
🕐 Time: 13:00 – 16:00 (Cocktails from 16:00)
💻 Attendance: In-person or Online
🎟️ Limited seats available
IN-PERSON: Register here
ONLINE: Register here
Don’t just hear the Budget. Understand it. Apply it.
