When you're liable to register for Vat
Before I give you my top tips, let's look at when you can register for Vat.
If you run an enterprise and have a turnover of R50 000 in the past twelve months, you can voluntarily apply for Vat.
But if your turnover exceeds R1 million in a 12-month period, (or you project to exceed R1 million), by law, you're liable to register for Vat. You must register on the VAT101 form.
Read on for four top tips you can use to meet your Vat responsibilities.
Tip #1: Account for Vat correctly
As soon as you register for Vat make sure your sales invoices and/or receipts meet the requirements of the Vat Act.
The tax invoices you issue and receive must be valid. This is so you can charge output tax and claim input tax. This is the same for your credit notes. If they're not valid, SARS will slap you with hefty fines and penalties.
For step-by-step advice, tips, tools and checklists to handle all of your Vat problems 100% correctly, simply follow this link…
Tip #2: Calculate and submit your Vat return
Using accounting software and/or an Excel spreadsheet, compile a tax report showing the output tax you've charged on sales and the input tax your suppliers charge you.
This report will show the net amount either payable to SARS or refundable to you. Use this report to file your Vat return.
For the comprehensive guide to completing your Vat return correctly, click here…
Tip #3: Keep your records!
Keep records of all your financial transactions for a period of five years.
Tip #4: Manage your cash flow
Payment of any tax including Vat, can contribute to cash flow problems, if you don't manage your small business correctly. Don't forget, that the additional cash isn't yours. The Vat belongs to SARS!
So if you can meet the above minimum top tips, why not register for Vat and claim back the Vat you pay as input tax? It's worth it if you can comply.
But if you can't manage with my top tips, it might be a good idea to register later when you can comply. But remember, if your enterprise already exceeds R1 million in any 12 month period, you have to register as Vat vendor.
P.S. For an easy to follow 11 step plan you can use to get your Vat registration number the first time, simply follow this link…