VAt for a sole Prop

[dd1313]

Hi Guys

How complex is VAT for a sole prop, would you need a consultant or can you
do the registration and returns on your own

Thanks
DD

[alloytoo]

Hi Guys

How complex is VAT for a sole prop, would you need a consultant or can you
do the registration and returns on your own

Thanks
DD


It's not difficult and you can do it online (The returns at least), you do however need to understand how the tax works.

Do you understand the concept of input credits on your purchases?

[dd1313]

Do you understand the concept of input credits on your purchases?

I have only been told you pay the difference between the VAt you pay and what you charge

[Venomous]

You need to look for further info.

Example: coffee, tea, sugar...you may not claim vat on staff refreshments. You may claim for the black bin bags....

[Celine]

look on the SARS website, they have VAT courses they offer to the public for free. these are at various levels. so why don't you attend them and learn a bit about it. there are 3 levels, beginners, medium and advance, beginners starts at the beginning, medium is advancing and so forth.
it's worth it if anyone is needing VAT.

[alloytoo]

look on the SARS website, they have VAT courses they offer to the public for free. these are at various levels. so why don't you attend them and learn a bit about it. there are 3 levels, beginners, medium and advance, beginners starts at the beginning, medium is advancing and so forth.
it's worth it if anyone is needing VAT.

Good advice.

VAT (which is based in New Zealand's GST) is an excellent simple tax, but you do need to get an idea of the types of things you can, and cannot claim as input credits, and advice which may be specific to your business.

Many people for example forget to Reclaim input credits on Bad Debts

Another bit of advice is not to rely on refunds arriving promptly from SARS. Once they have your money they will be loath to return it to you.

You may be entitled to refunds when you a)start your business, and b) operate in a seasonal business.

Refunds automatically attract attention with SARS and may be delayed for months and may get you audited.

If you caculate that you are due a refund of say R10000, make an adjustment of R10010 and pay the taxman R10.

In the next VAT return (when you have to pay SARS) reverse all or part of your adjustment and pay SARS less R10010.

What this does is delay the benefit of your credit by 1 month which seems silly, but SARS can delay your refund for far longer than that.

The beauty of this is however that since you are paying SARS more than you owe them, they cannot fine or penalize you in any way. It's perfectly legal.