Vat Registration In South Africa (2021)

We will provide the step-by-step process here and help you get started Vat registration in the shortest time possible.

Vat Registration In South Africa (2021)

We will provide the step-by-step process here and help you get started Vat registration in the shortest time possible.

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VAT Registration

Murrayfield online vat registration 2021

Table of Contents

Are you looking to do vat registration or you want to briefly understand how it works and all the requirements needed? You are in the right place let’s get started.

You probably have seen or heard the VAT, especially when you purchase items in a shop. Ever wondered what it means, or how it works? Here is a quick run-down.

VAT stands for Value added tax. It is indirect taxation on the value added to goods and services by suppliers and vendors in the economy.

South African companies registered for VAT have to add an additional 15% on the prices of the goods or services they sell.

Most expenses are VAT deductible such as consumables, advertising, and rent, telephone, etc. This depends on whether VAT was paid on these expenses.

The difference is paid over to SARS or claimed back from SARS.

The relevance of VAT.

Now you wonder, is VAT relevant to my business? Well, it depends. There are certain factors to look into.

For instance, who you do business with (now and even in the future), what you are selling or offering, and how much money you earn.

If for instance, you are buying from companies who add the VAT, you are paying VAT and you cannot claim it back from SARS unless you register for VAT. Simply put, the VAT portion forms part of your input cost.

Also, it is important to note that not all companies qualify to register for VAT. You need to be making at least R50 000 per year or R4 200 per month (for at least 2 consecutive months).

If you make less than that you cannot register for VAT yet. First, hit that target of R50 000 a year in turnover.

By now I’m sure you have tonnes of questions around VAT and its workings. Worry not, you can check out our blog to see you get an answer. If not get in touch with us on our details. We have experts to assist you.

Of importance, let’s talk about the VAT registration process itself.

What then is required to register for VAT?

Requirements for VAT registration at SARS

  1. A company/ other entity.
  2. A business bank account.
  3. Invoices/purchase orders to prove you are trading.
  4. Proof of addresses in South Africa.

Time frame.

How long does it take you might ask?

3- 5 working days. However, there is a possibility of depending on SARS closing now and then due to covid cases.

You should note that during this covid pandemic these times may differ as SARS builds up a backlog each time their office has to close due to covid cases.

VAT registration online.

Can I do VAT registration online? Absolutely! Here’s is what we do;

  1. We compile all documents and information as outlined above.
  2.  Then submit this online application online
  3. In most cases, SARS requires out TAX practitioner to visit a SARS branch and sign off the VAT application. We do that within 24 hours of getting the notice.
  4. Lastly, you get your VAT number Certificate online. That’s it! We do all this while you focus on other important aspects of your business.

Alternatively, you can buy one of our exclusive shelf companies that already have a VAT number

PAYE

As you grow your business as an entrepreneur and start employing people, you’ll need to know about PAYE.

It is essential you do! PAYE is an acronym for Pay As You Earn. It is tax paid to SARS by all employees who earn more than R6 918 per month.

If you earn less than that, you still need to register with SARS. Every 1st of March each year SARS publishes the latest salary tables with adjusted tax rates. PAYE tax depends on the salary you earn, age, and pay period.

Fun fact: PAYE is the biggest tax contributor for government funds in South Africa.

So when should you register for PAYE with SARS? The employer must register within 21 days of hiring an employee.

Requirements documents for Paye registration at SARS

You have decided to register for PAYE with SARS, what documents would you require? Simple, you need;

  • Company name
  • Registration number
  • Income tax number
  • Business description

Subsequently, you should note that you also need to estimate total payroll for the next 12 months, estimate the number of employees that you based your total payroll on, and a letter from the bank confirming the business’ banking details

UIF

What is UIF?

Another thing you need to care for is the UIF. It stands for Unemployment Insurance Fund. It provides short-term relief to workers when they become unemployed or unable to work because of maternity, adoption leave, or illness.

UIF also provides relief to the dependents of a deceased contributor.

Who is it for? All employees, including their employers, are responsible for contributions to the UIF.

They are exceptions.  (please check our blog for the extensive post).

The documents required for registration for UIF are the same with those PAYE. We will file them at the same time for you.

SDL

What is SDL?

One more term you need to familiarize yourself with is SDL. It’s short for Skills Development Levy.

It’s a levy imposed to encourage learning and development in South Africa. The levy’s contribution is determined by an employer’s salary. These funds are used to develop and improve the skills of employees.

If you are a start-up, you don’t need to concern yourself with SDL as yet.

It’s aimed at established businesses with a staff bill that exceeds R500 000 per year. At that total it becomes mandatory. The SDL constitutes 1% of the total monthly salary bill each month to SARS.

The good news about the SDL is that companies can claim some of the money for the skills they would have invested and developed in their employees. 

More good news, the documents required to register for SDL are the same as those for UIF.

In a nutshell, this means we help you register for all those at once. Pretty convenient right?

Get Started Now.

If you would like to be in these exclusive game-changers, please fill in the form below and one of our friendly and professional consultants will get back to you immediately and get your VAT registration process started.

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