Most VAT problems are not complicated tax questions. They are the same handful of habits, repeated across different businesses.
None of the mistakes below need a tax expert to avoid. They mostly need a routine, checked regularly rather than assumed to still be correct.
Skipping a nil return in a quiet month
Due even if no business took place. Yet a month with no sales is exactly when a return is most likely to be skipped.
Our dedicated piece on nil returns covers why that habit is a late filing waiting to happen.
Missing the five-year window on input VAT
Input VAT does not stay claimable forever. Five years after the end of the tax period in which it was incurred, and businesses that file invoices away instead of reconciling them monthly are the ones most likely to miss it. Our guide to input VAT recovery sets out what stays claimable and for how long.
Mixing up exempt and zero-rated on an invoice
The two labels look similar but mean different things for input VAT recovery. Our exempt-versus-zero-rated comparison exists precisely because this mix-up is so common, particularly on invoices for rent, exports and food.
Getting the label wrong understates or overstates what a business can legitimately claim back. A bookkeeper copying last year's template without checking the current lists is often how the error creeps in.
Ignoring e-invoicing until the deadline is close
The Merchant-Buyer Solution (MBS) is rolling out by taxpayer size, and treating a future deadline as somebody else's problem is a common way to be caught unprepared. Our e-invoicing guide sets out the dates by category, including the later date for smaller businesses.
Preparing early, rather than in the final weeks before a deadline, avoids a rushed and error-prone switch.
Assuming the small-business exemption applies without checking
Turnover changes year to year, and a business that once sat comfortably under ₦100 million can cross it without anyone noticing straight away. Our guide to the exemption threshold covers what to check before assuming last year's answer still holds.
A growing business is the one most likely to make this mistake, precisely because growth is the point where the exemption stops applying.
Treating VAT and withholding tax as one thing
The two taxes are easy to conflate, since they often sit on the same invoice. Our comparison of VAT and withholding tax covers the difference, and getting it wrong usually means charging or remitting the wrong amount to the wrong place.
Avoiding all six habits mostly comes down to routine. Reconcile monthly. File on the same date every month. Use the compliance deadline calendar rather than memory.
For the return these habits protect, see the VAT monthly return guide.