Vat registration or deregistration dilemmas tend to plague business owners, says Vat Matters
For example, many are aware of the compulsory registration for Vat
, but many don't realise that you're allowed to deregister for Vat
, provided you meet certain conditions.
For example, in the UK, the Vat
deregistration threshold has just risen to £77,000, says ByteStart.
In South Africa, you'd have to prove that your business is no longer liable to be registered – you can do so if the value of your taxable supplies falls below the threshold of R1 million in any consecutive 12 month period.
Obviously, you can also deregister for Vat
if your business closes down or if you conscientiously went through the Vat registration
process only for your business to never actually start up in the first place.
Here are the conditions where SARS will automatically deregister you from its Vat
Three reasons SARS can deregister your business for Vat
You registered voluntarily and have no fixed place of business;
You haven't kept proper accounting records of the enterprise or;
You haven't opened a bank account for your business, says SARS.
Deregister from the Vat system and apply for turnover tax instead!
But did you know that you can also de-register from the Vat
system if you register for turnover tax
for micro businesses instead?
apples to small businesses with a turnover of R1 million or less per annum with a year-end in February, says MoneyWeb Tax
exclusion is particularly significant as it removes a huge administrative burden based on the careful record keeping Vat
requires, says FSP Business
Just remember that on the date of deregistration, all assets need to be valued, with Vat
on this capital declared and paid to SARS, says Dryk Financial Services
Then, all you need to do is submit the Turnover Tax Application Form (TT01) to SARS, as this form includes the simultaneous cancellation of Vat
Simple as that!