I am an independent contractor and have been employed since 1 Jan 2025 in this role. . I have been consulting with tax practitioner to get my 2026 taxes in order who just made me aware that I may need to register for VAT. The advice is I backdate the VAT and make a voluntary disclosure to SARS. I do not yet have a VAT number and the invoices I raised did not include VAT. I crossed the vat threshold a few months back. Should I be backdating vat or can I register for VAT now that I am aware and wait to get approved so I can start charging vat going forward on my invoices for the new tax year? Anyone out there have some experience with this?
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VAT registration question
- Thread starter joker247
- Start date
WAslayer
Honorary Master
Are you still obligated to register now that the VAT registration limit has been increased to R 2.3 million per year..?
If not, it does beg the question what you are supposed to do for the few months you were over the limit..
If not, it does beg the question what you are supposed to do for the few months you were over the limit..
I just read about the Vat registration increase now. So am pretty confused now as to whether I need to register or not. If I register now I can claim Vat on my march invoice then have to deregister as I am very far away from from the 2.3m in a 12 month period.
WAslayer
Honorary Master
Probably time to speak to that tax practitioner again..
Jan van Riebeeckstad
Executive Member
Register for VAT and pay your taxes.
It's the right thing to do.
It's the right thing to do.
Went_For_Beer
Expert Member
RedViking
Nord of the South
Sounds right to me. Can always get a second opinion from another accountant.
All I know is once you are registered it is difficult to deregister and VAT can be a pain in the backside.
All I know is once you are registered it is difficult to deregister and VAT can be a pain in the backside.
So then you turning over more than a million annually?
Get registered. You will sleep better, and it will give you more opportunities with corporates / bigger business.
IF able, would advise you get an accountant on retainer.
small independant business could find someone for as much as +- 2k a month, with a bigger bill when they do your annuals. Its worth it NEVER having to deal with SARS yourself, for all things tax. And their bill is claimable.
Get registered. You will sleep better, and it will give you more opportunities with corporates / bigger business.
IF able, would advise you get an accountant on retainer.
small independant business could find someone for as much as +- 2k a month, with a bigger bill when they do your annuals. Its worth it NEVER having to deal with SARS yourself, for all things tax. And their bill is claimable.
airborne
Honorary Master
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And make sure the accountant is trustworthy and knows what they are doing because even if you hand off all responsibility to them for the books it doesn't abstain you from responsibility to SARS if they stuff up the books/tax returns, which can get very messy and expensive.
Johandupreez2
Member
Now that the VAT threshold has increased and knowing how much of a hassle it will be to deregister after going through all the trouble of getting registered in the first place. I guess the real deciding factor would probably be what the net amount payable to or refundable from SARS.
Yeah this is what makes it tricky. With the new threshold I will register for 1 month then have to deregister as I am no longer required to register as I am nowhere near the new threshold.
Johandupreez2
Member
I know in the past if you passed the threshold due to once off items or once off big transaction that would not recur again then you could get away without registering, they could probably see the admin headache it would cause on their side as well. I wonder if they wont see this in the same light if you have multiple years under the threshold as support and that this was the first year you went above and with the new threshold you wont reach it again and will register and deregister basically immediately. ( Obviously don't try it in March, you would have better luck in April its their year end they chasing targets at the moment.
Look SARS is unlikely to register you after one year of slightly crossing the threshold, because this is easily explainable, bonuses that aren't expected to be repetitive etc. In theory you should register retrospectively but the VAT burden would likely come out of your pocket if you do so, going back to a customer and charging them VAT after the performance obligations have been fulfilled will in all likelihood go down badly.
I would wait and see if SARS registers you, you will have to bite the bullet if they do. VAT is a massive administrative burden for SARS so they are not too strict on sole props who slightly exceed the threshold in my experience. Had a few clients who got registered retrospectively, SARS doesn't make too much of a fuss.
RedViking
Nord of the South
This. I learned the hard way.
RedViking
Nord of the South
I'm still trying to get rid of this company and SARS! Looks like the is light on the horizon as I am not considered non-compliant with CIPC and they are closing the company. So now I can go to SARS to say voetsek.
Wait and see. They will auto register you if they feel like it. If not, bask in the light of not having that administrative burden.
I've got a few acquaintances who got auto registered once their businesses crossed the threshold.
I've got a few acquaintances who got auto registered once their businesses crossed the threshold.
You and me both. Took me 10 years to get a CC properly deregistered with CIPC and SARS. Took bad advice from the accountant. His advice 'Just stop paying CIPC, they will deregister you, and it will filter through to SARS' Errm.. No, it won't. Took me ages to sort out.
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Lol always make sure you are tax compliant with SARS before you deregister a company with CIPC, the minute the company no longer exists any tax burdens will become the members/directors personal liability, as the Companies act has been contravened. It's honestly easier to remain CIPC compliant and keep the company dormant.
RedViking
Nord of the South
I've tried the ''compliant'' route for many years. CIPC is completely incompetent and it is a clown show. I am finally deregistered from CIPC. The accountant is wrong that it will just ''filter through SARS''. That is a separate clown show to deal with. My SARS stuff is all in order but they refused to deregister me without the CIPC business deregistered. Now it is onto Mission Clown Show 2
So looks like CIPC finally deregistered the company. (not to be confused for SARS!! SARS is a separate issue!)
Like many others, this orginization is completely incompetent. I followed the advise in this video after trying Option 2 for many years:
Still doesn't solve getting rid of SARS. But now at least they can't use CIPC as an excuse which was what they did up to now.
Like many others, this orginization is completely incompetent. I followed the advise in this video after trying Option 2 for many years:
Still doesn't solve getting rid of SARS. But now at least they can't use CIPC as an excuse which was what they did up to now.
Your next step is now getting a letter/certificate from them to confirm that.I've tried the ''compliant'' route for many years. CIPC is completely incompetent and it is a clown show. I am finally deregistered from CIPC. The accountant is wrong that it will just ''filter through SARS''. That is a separate clown show to deal with. My SARS stuff is all in order but they refused to deregister me without the CIPC business deregistered. Now it is onto Mission Clown Show 2
So looks like CIPC finally deregistered the company. (not to be confused for SARS!! SARS is a separate issue!)
Like many others, this orginization is completely incompetent. I followed the advise in this video after trying Option 2 for many years:
Still doesn't solve getting rid of SARS. But now at least they can't use CIPC as an excuse which was what they did up to now.
That's the part that took me forever. Got to the AR Deregistration phase pretty easily (by just not paying). But then to get them to talk to you (a non paying customer) and give you a certificate stating you are deregistered, is no easy task. Took me years.
Once I had that certificate, the SARS part was easy. 1 email was all it took.
Edit: O wait, looks like you have it already.