Because of the high level of VAT fraud SARS is making it increasingly difficult to register and the delay can be extremely frustrating especially for start-ups. For this reason registration is usually undertaken by professionals, such as Harbour and Associates, on behalf of their clients. However, this engagement takes a lot of partner time as is commensurately priced.
Who must register
Any business which is expecting to turn over in excess of R1m during the coming 12 months is required to register as a VAT vendor.
Where the turnover figure is less than R1m but more than R50 000, the business may register voluntarily. It then gains the advantage of being able to claim input VAT. The downside is the added administrative burden of preparing and submitting the (usually) bi-monthly returns.
If the business is a commercial rental business (not residential) then the minimum turnover for voluntary registration is R60 000.
Requirements to register (this list may not prove to be exhaustive as SARS keep changing their requirements)
(NB! We have never yet been able to register a company for VAT without ALL of the following) and can not accept the engagement unless it is provided). Registration is, even then, not guaranteed.
In order for us to start the process of Registering for VAT you must provide us with –
1) A copy of the certificate of incorporation appropriate to the entity begin registered
2) Copies of IDs or passports (if not South African) of the 2 main members/directors/trustees
3) An original cancelled cheque or original letter from the bank confirming the existence of the entity’s bank account
4a) The past 3 months bank statements showing turnover in excess of R50 000 together with copies of the corresponding invoices or
4b) Copies of signed contract(s) or purchase order(s) from customer(s) totalling at least R50 000
5a) A recent copy of a municipal utilities account in the name of the business to prove from where it operates or
5b) A recent copy of a municipal utilities account where it operates and an affidavit from the owner to the effect that the company operates from there or
5c) A copy of the lease agreement between the business and the lessor
6) Similar proof (to 5 above) of the residence of the representative vendor
7) The anticipated standard rated supplies for the next 12 months
8) The anticipated zero rated supplies (if any) for the next 12 months
9) The anticipated exempt supplies (if any) for the next 12 months
10) The nature of the business
11) The trading name if different from the registered name
12) A letter of authority from the business to us authorising us to act on its behalf for the purposes of the VAT registration.
13) The income tax numbers of the 2 main members/directors
14) The cell phone number and e-mail address of the representatitive vendor
15) The tax affairs of the representative vendor must be up to date and all outstanding taxes paid.
Tip When registering for VAT the “Date on which the person became liable for registration” is critical.
Follow this procedure –
1) Select the 1st of the month in which the first VAT invoice was issued to customers or the date of incorporation if no non-VAT invoices have been issued.
2) Advance to the 1st of the month in which you can prove that the turnover passed R50 000.
3) If you are now at a date after that on which the first VAT invoice was issued, go back to the 1st of the month in which the first VAT invoice was issued.
4) You are now at the “Date first liable”.
5) You will then be able to claim all input VAT from date first liable and will be liable for output VAT in all of your invoices subsequent to that date.
Should you wish to make an appointment, please feel free to visit Derek’s diary and book a time that suits you.
Need a shelf company or CC, a tax clearance, VAT registration or B-BBEE certificate? We offer a wide range of such services.