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What should my company's turnover be before I have to register for Vat?

by , 22 April 2014
Most companies don't know that they can or that they're supposed to register for Vat. There are some simple rules to remember when you're doing Vat registrations. Follow them to make sure that your company doesn't end up in trouble with SARS

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Think Vat doesn't apply to your payroll?
 
You're wrong! 
 
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Who has to register for Vat?
 
Anyone who makes taxable goods and services that are more than R1 million in 12-month has to register for Vat. This is according to Kallie Van de Merwe , an expert on Accounting and Tax Club. He also says that goods may be seen as 'likely' to make a certain amount according to a contract. This contract would be setup saying that the goods are expected to make over one million for example. 
 
A company can also register for Vat once its taxable goods bring in over R50 000 in a 12-month period. This is voluntary Vat registrations and is done out of choice. 
 
Until you have registered for Vat and have a Vat number, you can't charge your customers Vat
But what about if your earning drops to below R1 million?
 
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Avoid 200% tax penalty
 
 
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Can you cancel Vat registration?
 
South African Government Services says you can cancel your Vat registration if your earnings from your goods drop below 1 million. This means that if you start having a bad patch, you can cancel your Vat registration. This is done by applying for the cancelation. The Vat will only be canceled if you can prove that your goods have dropped to below R1 million.  
 
If you're closing down the business, you need to cancel the Vat registration as well. Otherwise, your business will still have outstanding Vat, even if it doesn't exist anymore.
 
Don't get caught out because SARS will penalise you if you're not paying Vat when you're meant to. Also always use a Vat calculator if you're in any doubt about how to calculate Vat. And use SARS efiling to help keep proper records and to manage your returns. 
 


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