VAT meaning - What is it & why do you need an accountant.

Accountants know the rules when it comes to the amount of VAT and the related rate applications, concessions, and implications.

VAT tax involves more than just submitting a VAT return. You need to ensure you don’t make mistakes that SARS comes back to question.

Many small business owners think that adding an accountant at the onset of their business is too expensive or not necessary.

It is only until a couple of years later that they start sinking into a compliance spiral due to the inability to recover from the penalties and interest imposed from non-compliance.

Tips for Small Businesses

If you are a Small Business Owner, make sure you are aware of your VAT compliance status.

Sticking your head in the sand does not absolve you of your tax obligations. SARS does not accept ignorance as an excuse.

The only way to ensure a future for your small business is to know your compliance responsibilities and to partner with an accountant that can help you uphold these.

Here are some simple tips:

• Check that all sales invoices have the correct information and vat numbers.
• Your income must be declared correctly. SARS uses AI to pick up on errors and their systems are improving by the day.
• Never manipulate your returns, tampering with what is legally due by you is a criminal offense, take this very seriously.
• Ensure you claim your VAT back wherever you can.
• Once registered as a Vendor then you are subject to VAT applies to all your supplies and should be declared correctly.
• Make sure you maintain proper records – these might be requested and inspected by the South African Revenue Service (SARS).
• Stick to the tax deadlines, paying penalties is such a waste of resources.
• Once you are a vendor you are not allowed to miss any tax returns, SARS will issue penalties if you miss returns.
• Maintain a good relationship with your accountant and supply what your accountant requests, the sooner your accountant receives what they need the sooner they can finalize the work on your VAT returns and keep you compliant.

Important points about VAT

Calculating your VAT can be tricky and hiring a professional like us is essential because:

• VAT on the supplies of goods and services must be paid over to SARS in line with the legislation, failure to adhere to this can have really bad consequences for the vendor.
• There are expenses on which you can claim input VAT, this will require an accountant to process for you so that you declare correctly.
• If your revenue exceeds R1million in consecutive 12month period, then it is compulsory to register for VAT
• You can opt voluntary for VAT registration should your taxable supplies exceed R50 000
• Your VAT return intervals, or month and period, will be determined by your business category, financial behaviour and tax compliance.

Yes, VAT can be extremely difficult for many businesses to maintain, and this is where we come in. Zeelie Professional Accountants SA will run your VAT periods for you while you run your business.

Why Zeelie Professional Accountants SA is your all-in-one vat services solution.

Frequently Asked Questions

What is VAT?

It is a tax on the "value added in the chain". Vat is levied at every step in the sales process of a product from its raw state to the consumer. This value-added chain ends with the consumer / end user, who consumes the goods and bearing the final cost.

What is the Standard Rate supply

The vat rate or as most refer to it, the standard rate, refers to the tax rate at which all taxable supplies will be taxed.

How much is VAT in South Africa

Currently the standard rate of VAT is 15%.

What are taxable supplies

Taxable supplies are supplies on which you must charge VAT must be levied whether at the standard or zero rate.

What is a VAT refund

VAT is refundable if you spent more than you earned in a VAT period on taxable supplies.

What is exempt from VAT

VAT Exempt supplies include:

Non-fee financial services, educational service providers, residential accommodation, and public and rail transport.

How can I verify a Value-Added Tax Vendor

You can verify a vendor’s status via this link: VAT Vendor Search (sarsefiling.co.za

What does it mean when people refer to Value-Added Tax as an “Indirect Tax”

Indirect tax refers to a tax levied on goods and services rather than on income or profits.

What is the Value-Added Tax rate in South Africa

The Value-Added Tax rate is levied at a standard vat rate of 15% on the supply of taxable goods and services.

It is compulsory to be registered if your taxable supplies exceed R1million per annum.

What is the difference between Value-Added Tax and Income Tax in South Africa

Many people make the error thinking that Value-Added Tax is the final tax.

At the end of a financial year is that the entity or trading activity will then have to declare profit/losses for the year, and these will then form part of the income tax calculations. This means your profit are subject to tax.

What is the price of your service

Our tax and accounting services and structure is based on the client. This enables us to service clients based on where they are financially and in the growth stage of their small business.

Which accounting system do we need to use

Our firm promotes Xero and Sage and the relevant software apps that integrate with these packages.

Is there an Online VAT Calculator

Yes, there are sites that have online calculators however it is best to use accounting software to process the financial information and then use the vat from this system as the basis to start your calculation.

What are the VAT Registration requirements

• Company Registration documents
• Business Bank account and proof thereof
• Proof of trading activities
• South African Business Address
• SARS Registered Representative (Zeelie Professional Accountants SA offers registration services)

How can I get a proposal or quote for our value-added tax registration and services?

-    Quote for a Company - Complete this form

-    Quote for an Individual - Complete this form

-   Schedule time with us for a video or telephone call

-   Contact our team

Do you require our SARS VAT Registration services? Let us help your Small Business grow with great Accounting Services.

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