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Thread: Registering for VAT

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    Registering for VAT

    My business has finally grown to the stage where I will have to register for VAT in the new tax year. It is not a bad thing, as our main business is manufacturing and I will probably be better off being VAT registered. Also, I decline most exports because I am not VAT registered and can therefore not get an export licence. I do import a little bit and it will just make life easier in many respects.

    Are there any specifics I need to be aware of? I have just installed Pastel Xpress Startup so I will be able to do better record-keeping. What else?
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    If you buy a new delivery vehicle you get all the vat back in one hit which I thought was quite weird, but handy at the time.

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    One thing I would recommend is reading through the VAT act and booking a session with a tax advisor, just let them explain what you can and cannot claim VAT on and any grey areas. Its all very interesting at the end of the day and well worth it.

    I fight large suppliers all the time that their invoices are illegal and do not comply with the VAT act, especially if they do not have full and proper descriptions of the services purchased/used. (fighting Telkom is useless though, they simply ignore you and say "so what" if you ask them to fix "Service Adjustment" to reflect what it really is)
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    Quote Originally Posted by Newretailer View Post
    It is not a bad thing, as our main business is manufacturing and I will probably be better off being VAT registered. Also, I decline most exports because I am not VAT registered and can therefore not get an export licence. I do import a little bit and it will just make life easier in many respects.
    It is always a pity if business has to be declined for whatever reason. What do you manufacture?
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    Newretailer (18-Dec-11)

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    SARS has developed some pretty good guide documents on VAT. If you're new to VAT, they're worth a read through.

    My main tips would be:
    • Use a good accounting software package
    • Keep your accounting records up to date
    • File your expense slips methodically.



    The days of tossing all your expense slips into a box and passing them onto a bookkeeper to do your taxes at the end of the year are over.
    The trouble with opportunity is it normally comes dressed up as work.

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    Quote Originally Posted by Blurock View Post
    It is always a pity if business has to be declined for whatever reason. What do you manufacture?
    We make natural bath & body products. It is not huge exports I am declining. A shop in the Netherlands, a shop in the UK, now and again a USA enquiry, those type of things.

    Quote Originally Posted by Dave A View Post
    SARS has developed some pretty good guide documents on VAT. If you're new to VAT, they're worth a read through.

    My main tips would be:
    • Use a good accounting software package
    • Keep your accounting records up to date
    • File your expense slips methodically.
    Thank you Dave. I will read it. I just bought Pastel Xpress and am busy loading all the data so I can have a clean start in February. I remember you suggested in a previous post to start your day with admin. I am going to get in the habit of doing this.

    Quote Originally Posted by Dave A View Post
    The days of tossing all your expense slips into a box and passing them onto a bookkeeper to do your taxes at the end of the year are over.
    Pity that
    Last edited by Newretailer; 19-Dec-11 at 07:07 AM.
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    Diamond Member Justloadit's Avatar
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    Quote Originally Posted by Newretailer View Post
    It is not huge exports I am declining. A shop in the Netherlands, a shop in the UK, now and again a USA enquiry, those type of things.
    If you really want to be in business today, getting foreign orders should be a huge part of your strategy, the more you get from overseas, the more independent you become of the local market and it's woes.

    I would not under any circumstances ignore any orders from outside of RSA.
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    Quote Originally Posted by Justloadit View Post
    If you really want to be in business today, getting foreign orders should be a huge part of your strategy, the more you get from overseas, the more independent you become of the local market and it's woes.

    I would not under any circumstances ignore any orders from outside of RSA.
    I have exported a fair amount before the VAT registration rules became so strict. The problem is that soap is heavy and shipping to other countries almost doubles the cost. We cannot supply it cheaper than they could get it locally to them because we don't get raw materials cheaper and I belive in paying my staff a living wage. Add to that that the EU has a lot of red tape. We got a whole bunch of our products approved for export to the EU but is was costly exercise.

    We do export to Nigeria. I am surprised at how big a hit a good soap is there and people don't seem to mind the 6 USD price tag per soap.

    It is simply easier to sell in South Africa. My aim is to stay in South Africa and open more shops here. However, it will be good to at least have the option of considering export enquiries which VAT registration will give me.
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    Looks like you have found a niche with boutique type soaps.

    Good luck!
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    Diamond Member Justloadit's Avatar
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    Quote Originally Posted by Newretailer View Post
    The problem is that soap is heavy and shipping to other countries almost doubles the cost. We cannot supply it cheaper than they could get it locally to them because we don't get raw materials cheaper and I belive in paying my staff a living wage. Add to that that the EU has a lot of red tape. We got a whole bunch of our products approved for export to the EU but is was costly exercise.

    We do export to Nigeria. I am surprised at how big a hit a good soap is there and people don't seem to mind the 6 USD price tag per soap.

    It is simply easier to sell in South Africa. My aim is to stay in South Africa and open more shops here. However, it will be good to at least have the option of considering export enquiries which VAT registration will give me.
    If the customer is prepared to buy the product irrespective of the price, who are you to decide the price is too high?
    Getting customers to buy the product in the first place is the most difficult part of business.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
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