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Thread: Business without a VAT number

  1. #1

    Default Business without a VAT number

    I've started a small startup business, but we aren't registered for a VAT number because as far as I know, the turnover needed is quite alot, and at present thats not happening.

    When I quote people, I just quote including VAT... Are there any repercussions here? The business is expected to do an annual turnover of about R200k, but right now its nowhere near that.

    What are my options here? Any advice would be appreciated?

    /And I know I should just get an accountant, but i just wanted to check here first.

  2. #2

    Default

    As long as you remain below the Turnover threshold and always include VAT, then no problem.
    Celine: "you fall into the "stupid" category."

  3. #3

    Default

    AFAIK if you don't have a VAT number you are not allowed to charge VAT.
    If you ARE charging VAT, make sure that you are setting the VAT aside to give to SARS, otherwise you will be in major ***.

  4. #4

    Default

    Ok, those both are conflicting answers? But looking here, it seems as long as things stay below the threshold of R150k then all is good. But thats turnover tax, is that different to VAT tax?

    It would seriously suck to have to keep all the VAT just in case. Right now, we're building the business and are aready paying VAT with our suppliers. But will probably exceed the minimum R50k turnover amount in the next couple of months, so then we can register for VAT. But is it really necessary to register, our turnover wont be anything near the compulsory R1mil mark - yet .

    Its seriously confusing?! I do not want a big SARS bill, lol

    What do I need to do to be ok? Keep the VAT?
    Last edited by markface; 20-09-2011 at 11:49 AM.

  5. #5

    Default

    phone SARS

  6. #6

    Default

    Quote Originally Posted by thisgeek View Post
    AFAIK if you don't have a VAT number you are not allowed to charge VAT.
    This.

  7. #7

    Default

    Quote Originally Posted by D3x! View Post
    phone SARS
    Ok ok, I think I need to get an accountant to chat to.

    Quote Originally Posted by HavocXphere View Post
    This.
    Really?! That makes no sense? SUrely if I buy supplies that include vat, then I can't sell it excluding vat surely?

  8. #8

    Default

    Quote Originally Posted by thisgeek View Post
    AFAIK if you don't have a VAT number you are not allowed to charge VAT.
    If you ARE charging VAT, make sure that you are setting the VAT aside to give to SARS, otherwise you will be in major ***.
    Surely you mean that he cannot claim VAT?

    If he buys goods VAT inclusive then he must sell them VAT inclusive.

    If he buys goods VAT exclusive then he can sell them VAT inclusive but will have to pay SARS the VAT he collected.
    Celine: "you fall into the "stupid" category."

  9. #9

    Default

    Quote Originally Posted by markface View Post
    Ok ok, I think I need to get an accountant to chat to.


    Really?! That makes no sense? SUrely if I buy supplies that include vat, then I can't sell it excluding vat surely?
    just call them, they will answer your questions accurately.

    say you buy a pen for R1 ex vat, your cost is R1,14, so you sell for say R3

    you shouldn't be looking at the ex vat as far as i am aware as you can't claim anyway

  10. #10
    Super Grandmaster
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    Default

    if you gross turnover is less than 1mil you don't need to register.

    Don't quote VAT. You are not charging it. State all prices are ex-VAT.
    If people ask then you tell them you don't do VAT in a nice way. They ask coz they wanna know if the price will be more.

    If you deal with businesses then they'll claim the VAT you charged & you can land in hot water.

  11. #11
    Super Grandmaster
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    Default

    Quote Originally Posted by MickeyD View Post
    Surely you mean that he cannot claim VAT?

    If he buys goods VAT inclusive then he must sell them VAT inclusive.

    If he buys goods VAT exclusive then he can sell them VAT inclusive but will have to pay SARS the VAT he collected.
    Yip,

    so if the OP buys an item for R100 > R114 VAT inclusive his cost is R114 coz he can't claim VAT back.

  12. #12

    Default

    Ok, thanks guys. You've all made me realise I'm way outta my depth here, gonna have to phone SARS or talk to someone who knows face-to-face so I can ask all my noob questions.

    The business is just starting to make some real money so I needed to find all this stuff out asap, been concentrating on all the technical stuff (which I'm good at), and left this stuff to last (which I'm a real noob at).

    Thanks again...

  13. #13

    Default

    Quote Originally Posted by MickeyD View Post
    Surely you mean that he cannot claim VAT?

    If he buys goods VAT inclusive then he must sell them VAT inclusive.

    If he buys goods VAT exclusive then he can sell them VAT inclusive but will have to pay SARS the VAT he collected.
    He can't pay VAT to SARS if he doesn't have a VAT number. VAT claimed goes against VAT paid.

  14. #14

    Default

    Quote Originally Posted by unskinnybob View Post
    He can't pay VAT to SARS if he doesn't have a VAT number. VAT claimed goes against VAT paid.
    I agree with you 100%. My last sentence is a very subtle warning of what would happen if he messed around with VAT and got caught out.
    Celine: "you fall into the "stupid" category."

  15. #15
    Grandmaster
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    Aug 2005
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    Underberg, KZN
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    4,849

    Default

    You issue INVOICES not VAT INVOICES to your clients.
    Your price to your customers is your cost+markup. Nowhere say incl vat or excluding vat. Vat is irrelevant for you.
    You PAY VAT you do not CHARGE VAT

    You may also voluntarily register for VAT. YOu dont have to wait until you hit the threshold. But do not charge Vat and 'keep' it to pay SARS later.

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