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Thread: New to Vat

  1. #1
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    Cool New to Vat

    Firstly, I love this website. I get so much good advice here. So thank you. I am a very hands-on business owner when it comes to our finances and taxes so instead of employing someone fulltime I prefer to learn it myself so when I do eventually hand it over to someone else I will have the knowledge to see that they are doing their work correct. Call me paranoid but bad book keeping and accounting individuals/firms sunk my father in laws business. I have a book keeper that helps me from time to time and then of course our CC has an accountant so not to worry I am not completely helpless.

    Our business has done exceptionally well to the point now where I am creeping up to the VAT threshold (R1mil) on turnover. I might fall under this by end Feb but I might not so I am thinking best to register now - it will be inevitable anyway and its professional to charge vat.

    I have form VAT101e so will get done done with all the extra bits and go to Sars in person.
    So my questions (yes yes they are extremely novice) are:

    Do I start charging VAT immediately once I am registered? Might I end up in a situation where I get the VAT registration certificate with an earlier date and then I never charged vat on invoices issued during that period of waiting for the certificate? I use Quickbooks accounting and will turn on the VAT feature and set it all up once I get the registration certificate.
    Do you guys recommend I keep this money aside in a separate account so as to not end up spending it? We are a small business and financial planning is vital!
    When is VAT payable for a CC? Do you also pay it over twice a year like provisional tax? If so when? What tax forms do you fill out for this when making payment?
    Will my accountant then also do a VAT return for the CC and if so when?
    Vat codes - how do these work in general and I presume I can find this on SARS website?
    Anything else useful I should know?

    Thanks a mil!
    B

  2. #2
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    Ok I see now that people do VAT returns every month due on the last business day of every month. Anyway this is why I need help! haha!

  3. #3
    Platinum Member Mike C's Avatar
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    When you start off you will probably do your VAT return every second month. SARS will tell you when to start.

    It is easiest to do VAT returns via Efiling as it is quicker and more efficient. Returns have to be in by the 25th of the following month. ie If VAT is for Feb/March, return for those months are due by 25th April. (Penalties if you are late)

    I would say that you may only start charging VAT once you have your VAT number. It must appear on your Invoices with the words TAX INVOICE.

    If you are able to keep the money aside and be disciplined about it, it will make life much easier. When you need to pay VAT there is no excuse for not having it available (according to SARS) because that money wasn't yours to use ... basically you are acting as a collection agency for them.

    I don't know QuickBooks, but Pastel Accounting has an option to print out your Input/Output and tells you what you owe or what is owed to you. It might be helpful for your accountant to work through the first few returns with you so that you get a grasp of what it is all about.
    An education isn't how much you have committed to memory, or even how much you know. It's being able to differentiate between what you do know and what you don't. - Anatole France

  4. Thanks given for this post:

    belladancer (14-Nov-12)

  5. #4
    Site Caretaker Dave A's Avatar
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    Just ask if you have any Quickbooks related VAT setup questions - I'll do my best to help where I can. Normally the Quickbooks help info does a pretty good job, though.
    The trouble with opportunity is it normally comes dressed up as work.

  6. Thanks given for this post:

    belladancer (14-Nov-12)

  7. #5
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    Thanks so much as always - this sets me on the right path for now to get going.

    I'll be back! *Arnold voice*

  8. #6
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    Belladancer,

    I have so much respect for owners who WANT to be involved in the bookkeeping part of their business. Too many people just claim not to "grasp numbers/accounting" and give up.

    A definite must-read for you would be the VAT404 - VAT guide for vendors (www.sars.gov.za). VAT will make so much more sense to you after reading that.

    With regard to the VAT101e - make sure you have EVERYTHING on the list, as they are very strict these days on registering businesses. They will be interviewing you in order to find out more about the business. So come prepared, or you will be going back!

    Do I start charging VAT immediately once I am registered? - I have heard this question so many times, and I am having trouble with the exact same thing at the moment. On the form there is a place where you have to fill out the effective date. I have decided to stick to that date. But I don't think anyone can give you a definitive answer...

    Do you guys recommend I keep this money aside in a separate account so as to not end up spending it? We are a small business and financial planning is vital! - What I do is I keep an eye on the VAT report. But as Mike C said, SARS takes no excuses for not paying VAT, as you are just collecting SARS money on their behalf. So I think it would be safer to keep the money aside.

    When is VAT payable for a CC? Do you also pay it over twice a year like provisional tax? If so when? Most businesses are registered on a bi-monthly basis. SARS chooses whether it will be even or non-even months.

    What tax forms do you fill out for this when making payment? - You fill out a VAT201. If you submit AND pay via e-filing, you only have to pay on the last working day of the month (Week days, excluding public holidays). Should you pay via internet banking, the due date is the 25th (or the last working day before the 25th). There is, however, an amendment in the Tax Administration Bill that might cause everyone to pay and submit by the 25th, but as far as I know there is no clarity yet.

    Will my accountant then also do a VAT return for the CC and if so when? I agree with Mike C again: Let your accountant run through the VAT201 and VAT report with you for the first few periods just to be sure.

    Good luck!

  9. Thank given for this post:

    belladancer (16-Nov-12), Dave A (21-Nov-12)

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