You will be forgiven if you were beneath the delusion that VAT is a accessory tax. It’s not, and abounding intricacies can cruise you up. Let’s get your VAT aeronautics pointing due arctic to a adjustable direction.
If you are affairs appurtenances and/or casework you are apprehension taxable supplies. If you are authoritative taxable food you may be a vendor. A bell-ringer is a accustomed person, a company, a trust, a anatomy of persons, a municipality, a accessible authority, who is registered or should be registered for VAT.
The basal band is, if you advertise anything, whether it’s your old shoes or home-cooked meals, or cede casework as a acknowledged hawkeye or a cartilage breaker, and your absolute about-face is added than R1million, or it is acceptable to be R1million a year, again you should annals for VAT.
No, I apperceive what you are thinking. You are authoritative your casework (skills and time) accessible to your employer and you are accepting paid for it. Well, I abhorrence to breach it to you but application does not accomplish you a bell-ringer and you are not accustomed on an action (independent contractors afar from this altercation for now).
If you’re starting out again you should be befitting a aing eye on the invoices you are issuing. If you’re aing R83333.33 a ages you will accept to annals for VAT in that month, aloof endlessly abbreviate of a DNA sample and affairs your wife you are now a registered VAT vendor.
Congratulations (commiserations), now you accept to pay over the VAT you allegation your audience to the SA Revenue Service (Sars) – answerable and not accustomed (debtors are included, doctors).
In the aftermost article, I acclimated the affinity of your mom giving you money (PAYE is the mom) VAT is your dad. You aggregate the money on his behalf, and you are instructed to accompany it all home.
When you accept R115, again R100 is yours, and the R15 is your dad’s money, not yours. VAT is agnate to assurance money – you are not accustomed to absorb it.
Your dad has been about the block and knows you accept to annex a accumulating apparatus (baseball bat) to aggregate the rent. Much the same, Sars allows registered VAT vendors to affirmation ascribe VAT if they accept a accurate tax invoice.
You acknowledge the assets from appurtenances and casework and the bulk of VAT calm on a VAT 201 form, and Sars will acquiesce you to abate the bulk payable with the VAT that you paid to added vendors’ ascribe (VAT self-assessment).
Remember your dad in all this? I am abiding that he is activity to appetite to see the invoices for the “collection tool”?
Well, Sars is no different. If you were naughty, your invoices would be arrested added frequently, right?
There are convenance notes, regulations, the VAT Act etc, and you should argue your tax practitioner, accountant or accountant to ensure that you are charging anybody VAT that you should and that you are alone claiming VAT on condoning costs if you accept a accurate tax invoice. No, salaries and accomplishment are not condoning expenses.
Out of all the taxes, this is the scariest one of them all. VAT is a gremlin! When it gets wet, there is abhorrence and mayhem. Please don’t get the abecedarian wet.
Willem Oberholzer is a administrator and tax adviser of Probity Advisory.
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