[Question] VAT - when to charge

[elaine25]

Morning All

I have a small cc registered and I would like to begin trading.
I buy and sell scrap metals.

The place I am buying from sells it to me with VAT.
The company I am selling to is also VAT registered - but I am not - can I charge VAT until I am VAT registered??

I can't register with SARS / VAT until I have 3 months trading.

Elaine

[sanimoyo]

seems like it's best to register when the 3 months is up.

[Pap_sak]

As I understand it you cannot charge vat until you are registered and have a valid Vat number

[Dave A]

As I understand it you cannot charge vat until you are registered and have a valid Vat number

I'll second that.

And why open yourself up to a charge of fraud
Your client buying from you won't be able to claim your "invoiced VAT" as input VAT anyway without your VAT number.
What they could possibly do is claim deemed VAT on second hand goods purchased for resale.

[wynn]

Well seeing as you have been trading since june you can register for vat now, five months later

[BusFact]

No you cannot charge VAT unless you have a VAT number. Also you will need to reach a certain turn over in a year. Its not just a 3 month requirement.

I'd suggest you bite the bullet for a few months and then register for VAT. The last thing you want is to try and beat the tax system. If SARS audit you, the taxes and penalties and stress can make it a really unpleasant experience.

If you are desperate, speak to a reputable tax consultant. I vaguely remember something about being able to back date some transactions for VAT, but I may well have dreamt or misunderstood the advice, so please don't use it from me. Rather check with a consultant.

[SilverNodashi]

No you cannot charge VAT unless you have a VAT number. Also you will need to reach a certain turn over in a year. Its not just a 3 month requirement.

Last time I checked you can register for "voluntary VAT" without having the required turnover

[BusFact]

There are two thresholds. Below the first turnover threshold you cannot register for VAT. Above it you can if you wish. Once above the second threshold, then you have to register.

However, the issue is more along the lines that in order to charge VAT, you need to display you VAT number and that of your customers (if they have one) on the invoice. If you haven't received that number yet you can't issue a valid VAT invoice.

SARS could also refuse to register you for other reasons, such as previous VAT fraud, incomplete FICA type documentation, etc. Apparently they are now even interviewing some applicants in person. Basically, not just anyone will get a VAT number. Its probably wiser to let the process run its course.

[mbsmit]

I'll second that.

And why open yourself up to a charge of fraud
Your client buying from you won't be able to claim your "invoiced VAT" as input VAT anyway without your VAT number.
What they could possibly do is claim deemed VAT on second hand goods purchased for resale.

Agreed! You are not allowed to levy Value Added Tax unless you are a lawful VAT vendor.