When must you register for VAT
Many taxpayers are under the illusion that the R1m threshold is applicable to a financial year when in fact the compulsory registration is applicable when in any given rolling period of 12 months you exceed R1m revenue. Then you are liable to register at the commencement of next month.
Who should register for VAT
It is compulsory to register for VAT if your business' taxable supplies exceed R1m in any consecutive 12-month period, or when the value of the taxable supplies that will be made in a year will exceed R1 million under the provisions of a written contract.
Voluntary Registration is also an option taxable supplies exceeded R50 000 in the past 12 months.
What are the benefits of registering for VAT
Paying VAT improves a country’s financial well-being and SME’s are the perfect candidates to drive this growth in an economy. Registering for VAT means you will also be able to offset the VAT you spend against the VAT that must be paid over to SARS. VAT is a “value-added tax” thus your liability is the “value-added” in the chain. Being VAT registered also indicates to other vendors that your business is established and reliable.
What happens if you don’t pay VAT
Any VAT due that is paid after its due date attracts an immediate 10% penalty. Then after that interest is levied. Taxpayers are urged to comply with this. Having your non-compliance discovered by SARS Auditors adds levels of additional stress and cost. It is better to follow the rule of law to the letter, you will be very happy you did or unhappy when SARS audits you and issues an assessment for Tax.
Contact our team today so that we can help you stay compliant with your VAT submissions.
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