Business without a VAT number

[HavocXphere]

Thanks guys.

Big help, we'll just keep VAT out of the invoices for now.

Just keep in mind that this might hurt your biz.

The company buying from you can claim input tax only if you're charging output. (Exception=2nd hand goods). So there is an incentive for them to find a supplier who is VAT registered.

 

[D3x!]

Just keep in mind that this might hurt your biz.

The company buying from you can claim input tax only if you're charging output. (Exception=2nd hand goods). So there is an incentive for them to find a supplier who is VAT registered.

erm it would be kinda illegal for him to charge vat if he isn't vat registered

 

[Cicero]

erm it would be kinda illegal for him to charge vat if he isn't vat registered

I dont think he's denying that, I think he means it'll hurt from a business sense. IE a supplier who is VAT registered would be preferred rather than buying from us, not vat registered. So we'll lose out.

On one particular project we priced quite a bit cheaper than a competitor - even before tax - but they are VAT registered. We're just waiting for confirmation of order, and hoping the VAT issue doesn't hurt us and lose us the order. Time will tell.

 

[Subways81]

Excerpt from http://askentrepreneur.entrepreneur...s-the-minimum-threshold-for-vat-registration/

Persons who make taxable supplies in excess of R1 million in any 12-month consecutive period are liable for compulsory VAT registration, but a person may also choose to register voluntarily provided that the minimum threshold of R50 000 (as of 1 March 2010) has been exceeded in the past 12 month period.

So as far as I can see, if you make R50000 per year you can register for VAT.

 

[Venomous]

Just keep in mind that this might hurt your biz.

The company buying from you can claim input tax only if you're charging output. (Exception=2nd hand goods). So there is an incentive for them to find a supplier who is VAT registered.

Or he can make sure his products &/or services are priced in the same range as other companies' ex-vat pricing....

 

[undesign]

Or he can make sure his products &/or services are priced in the same range as other companies' ex-vat pricing....

Which will negatively influence his profit as his input costs are more expensive because he can't claim input VAT...

 

[anarchy2007]

If a company that is not VAT registered charges VAT, that company is guilty of fraud and will be liable to pay the VAT in the amounts invoiced to SARS whether they are VAT registered or not.

When I started my company back in 2000 we did not register for VAT. Soon after we started making the target R20,000.00 per month (the requirement at the time to register). We registered for VAT and was charged back taxes for 6 months even though we weren't VAT registered and did not charge VAT. Their response was that we should've known that we were going to have to register. The worst of all was that we weren't allowed to claim VAT for the period that we weren't registers.

Bottom line is, don't f@ck with the VAT man. You will not win.

 

[IceColdLettuce]

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.

Add an extra 15% to your mark up. Add 0 to your vat column. You can cover the amount you are paying to your suppliers without showing that you are charging vat. Problem solved

 

[acidrain]

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.

This.

If you state incl. VAT on your invoice, customers will assume you are VAT registered and they will claim it from SARS.

Just state clearly, no vat.