Do you know when NOT to register your business for Vat - even if your income exceeds the R1 million turnover threshold?
Any person who is liable to register for Vat but fails to do so is guilty of an offence and will be liable on conviction to a fine or imprisonment for a period not exceeding 24 months. That's plenty of incentive for you to register your business for Vat early - before your business turnover reaches the R1 million threshold.
But did you know that some enterprises actually aren't supposed to register for Vat purpose - even if their turnover exceeds R1 million and they comply with all other registration requirements.
According to the experts at the Practical Vat Loose Leaf
, these are enterprises that render ONLY exempt supplies.
8 exempt supplies that don't qualify your business for Vat registration
• Supplying financial services (such as loans, life insurance, etc)
• An association not for gain, supplying goods which were donated to it
• Supplying residential accommodation; leasehold land or land situated outside of South Africa
• Services of a body corporate, share-block scheme or any housing development scheme for the aged (but not home owners' associations)
• Road and rail transport to fare-paying passengers
• Supplying educational services
• Supplies by a trade union
• Services of caring for children in a crèche or an afterschool care centre
If your business renders partly taxable and partly exempt supplies, you may register for Vat
for the taxable part. But be aware that SARS can still refuse your registration in certain instances
. So make sure you've got your Vat
ducks in a row.