Please help with VAT question for small business.

[confusedwithtaxtwo]

Hi Guys,

I know this is going to sound incredibly ignorant and stupid as a business owner, but unfortunately when I bought my business with my partner 4 months ago, I immediately had to go to the UK as my mom was passing away. My partner was left to run with the financial side of things and I worked support remotely and since returning I have been doing all the onsite visits/ remote support etc. etc.

So a basic background – we purchased the company and while we have been waiting for our VAT number and all that, we have been purchasing and selling hardware with the previous owner’s VAT number, and using their old accounts with the suppliers (and paying with our bank account). This has ended up with us being hit incredibly hard by SARS.

Now I am just trying to find a way to make sense of this and save ourselves a lot of money, as for a small company like ours to be paying SARS up to 20k a pop is killing me. Am I correct in saying that the old company would have been submitting returns on their VAT number and getting a rebate (even though we were the ones invoicing the clients)? If so I want to request that they refund us the cash – I’m sure they will do so as they are good people but both not very contactable now as they are doing non-profit work in Africa so hardly ever have signal…

Please someone that might be familiar with this sort of thing let me know if I have got this right, or if I am completely wrong and need to just write that money off without even attempting to look into it. Also please let me know if I have not explained myself correctly or you need more info.

Thank you so much in advance.

 

[quovadis]

1) The business you bought - did you buy the legal entity or just take over the customer base?
2) Are you trading as the business you bought or a new entity?

 

[confusedwithtaxtwo]

Hi Quovadis,

Thanks for the response! We bought the customer base, registered our own company and are trading as the previous company.

 

[quovadis]

Hi Quovadis,

Thanks for the response! We bought the customer base, registered our own company and are trading as the previous company.

Are you invoicing your customers VAT?

 

[Swa]

VAT rebates should go onto the account. SARS doesn't pay it back into a bank account so it shouldn't matter if you were trading as the previous company. Just get it sorted as soon as possible as trading like this could have other consequences and stop charging VAT in the mean time.

 

[-SBS-]

With VAT theres Input VAT and Output VAT. You charge Output VAT on your sales, and claim Input VAT on your purchases/expenses, with the net amount being paid/refunded to/by SARS.

There isn't a rebate that the old company will get as a result of your purchases with their VAT number.

PM me your details and we can try point your in the right direction.

 

[dunkyd]

...and if you are waiting for a refund......best of luck. Now 3 months late !!!