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What is VAT?

What is VAT?

What is VAT?

What is VAT?

The following excerpt is from the SARS website:

Value-Added Tax is commonly known as VAT. VAT is an indirect tax on the consumption of goods and services in the economy. Revenue is raised for government by requiring certain businesses to register and to charge VAT on the taxable supplies of goods and services. These businesses become vendors that act as the agent for government in collecting the VAT.

VAT is charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services.

VAT is presently levied at the standard rate of 14% on the supply of most goods and services and on the importation of goods. The VAT on the importation of goods is collected by customs. There is a limited range of goods and services which are subject to VAT at the zero rate or are exempt from VAT.

Who should register for VAT?

 

Any person that carries on a business may register for VAT. The term person is not only limited to companies but also includes, amongst others, individuals, partnerships, trust funds, foreign donor funded projects and municipalities. In order to register, an application form must be completed and a specific process must be followed, both of which you can find on our page how to register for VAT.

It is mandatory for a person to register for VAT if the taxable supplies made or to be made is, in excess of R1 million in any consecutive twelve month period.

A person may also choose to register voluntarily if the taxable supplies made, in the past period of twelve months, exceeded R50 000. As from the 1st of March 2012, qualifying micro businesses that are registered for Turnover Tax may also choose to register for VAT provided that all the conditions for voluntarily registration for VAT are met.

A person who is obliged to register for VAT is referred to as a vendor.

When should I submit returns and make payments?

 

A vendor is required to submit VAT returns and make payments of the VAT liabilities (or claim a VAT refund) in accordance with the tax periodallocated to the vendor. The VAT returns and payments are normally submitted / made on or before the 25th day after the end of the tax period. Late payments of VAT will attract a penalty and interest.

 

Payment method​ Return due date​ Payment due date​
​SARS branch (Cheques only, not exceeding R50 000) 25th​ 25th​
​Payments at ABSA, Albaraka Bank Limited, Bank of Athens, FNB,
HBZ Bank LTD, Nedbank and Standard Bank.
​25th ​25th
​Electronic Fund Transfers (including internet banking) ​25th ​25th
​eFiling of return and payment via either SARS eFiling or Electronic Funds Transfers (internet banking) ​Last business day ​Last business day

Top Tip: On 19 October 2012, SARS clarified in a notice that vendors who use eFiling may continue to submit their VAT declarations on the 25th of the month. The benefit of no interest, penalties or prosecution will remain effective if the declaration and payment are submitted via eFiling (or EFT) on or before the last business day of the month.

How do I access older VAT-related documents?

 

The SARS website does not host old or withdrawn documents, except for those owned by Legal & Policy, for example earlier published Proclamations, Regulations and Government Notices, as well as the archived VATNews copies.

The VATNews copies can be found in the Legal & Policy Archive, which has been made available for research and reference purposes.

My business and tax

MY BUSINESS AND TAX 

The following is an excerpt from the SARS website, which you can find here.

My business and tax

My business and tax

What’s new?

  • 15 December 2014 – Changes in the changing of banking details
    For changes in the changing of banking details process with effect from 15 December 2014, click here.
  • 11 December 2014 – Need a Power of Attorney?
    All the SARS Power of Attorney (POA) forms are templates provided as options for taxpayers who don’t have access to any other POA for dealings relating to tax matters specifically.

    Any POA is acceptable as long as it’s within the validity period, contains the required information and is duly signed by the person transferring their authority to someone else to act on their behalf, read more.

  • 6 December 2014 – CIT legal changes on the ITR14 form
    We’ve made minor changes to the ITR14 for the 2014 year of assessment due to legislative changes. Provision was made on the return for the disclosure of additional information, read more.
  • 13 November 2014 – e@syFile™ Employer
    The latest version of e@syFile™ Employer is now available for downloading. For more information on the changes made, read more.
  • 10 November 2014 – Transferring taxpayers on eFiling
    Important changes have been made when transferring a taxpayer on eFiling. Read more here.
  • 3 November 2014 – Merging all types of taxes
    From 1 November 2014, a new merging function is available on eFiling. This function will help you easily merge all the types of taxes into one single profile for each client/entity. Read more here.
  • 6 October 2014 – New Income Tax Return for Trusts Now Available
    SARS is improving the Income Tax Return for Trusts. The new form (ITR12T) is now available. Read more here.
  • 6 October 2014 – Employment Tax Incentive (ETI) Refund Process
    The refund process is expected to be introduced in the last quarter of 2014, see the latest important facts about ETI refunds. Read more.
  • 26 September 2014 – eFiling Credit Push option extended
    The eFiling Credit Push option has been extended to Bidvest Bank and allows you to cancel a Credit Push transaction, read more.
  • 23 September 2014 – Anti-virus and e@syFile™ Employer
    Are you having problems with your anti-virus while downloading e@syFile™ Employer? Read more here.
  • 5 September 2014 – No more assistance to unregistered Tax Practitioners
    From 8 September 2014 Tax Practitioners who aren’t registered with both a Recognised Controlling Body (RCB) and SARS can no longer be assisted, read more.
  • 6 August 2014 – The Payment Advice Notice (PAN)
    The new Payment Advice Notice (PAN), has been extended to Customs and Excise clients who wish to make payments at banks or via electronic funds transfer (EFT), read more.
  • 10 June 2014 – Enhancements for registered representatives (e.g. Public Officers)
    With single registration, registered representatives (e.g. company representatives or Public Officers) are now able to do additional functions on eFiling, read more here.
  • 12 May 2014 – Single Registration
    The way you register for tax & customs and update your existing details has changed from 12 May 2014. For more information, click here.
  • 10 February 2014 – Qualifying Employers
    Did you know you may claim the Employment Tax Incentive (ETI) on your EMP201 submission? To see if you qualify or for more information read more.
  • 5 November 2013 – Discontinuation of Debit Pull Transactions on eFiling
    As of the end of October 2013 Debit Pull transactions are discontinued for ABSA, FNB, Investec, Nedbank and Standard Bank. Read more.

 

Get off to a good start with your accountant

Start-ups are an integral part of a vibrant economy. They contribute significantly (disproportionate to their size) towards new idea creation, new technology and exciting products and services. Since Start-ups work in an environment of low resources and limited funding (generally), all their focus is geared towards the core activities of a business. This could be either sales or marketing or research and development. This article will show you how to get off to a good start with your accountant.

Get off to a good start with your accountant

Get off to a good start with your accountant

Support functions like accounting, IT, and HR are usually make-shift arrangements or ignored completely. However accounting is one function that can be ignored at one’s own peril. Good Accounting is the means to a greater end- informed decision making and better controls. Information gleaned from a good set of books can give valuable insights into- how assets can be utilized, how sales can be analyzed and how expenses can be managed and inventory be streamlined better.

For example, an accounting system of an equipment manufacturing company that generates revenue trends for different income streams can lead to useful insights like service revenues are growing faster(though on a smaller base). Similarly, it can probably also show that service revenues are far more profitable than product sales. Hence the company can work towards selling more service contracts (and subsidize the equipment sales). Accounting system can give you more information that just how much money your firm makes!

Given the importance of accounting systems in decision making, its’ important that an entrepreneur always works towards establishing better accounting systems in his/her company , right from the early days.

I have listed below the five guidelines for start-up accounting:

1. Buy for the near-future rather than the present

Choose an accounting package that can not only meet your immediate needs but also handle the expected growth in near future. I have seen many companies use a basic version of accounting software, only to spend much more money doing a tedious migration to a larger software after some-time.

Thumb-rule- buy a accounting software which is one version higher than the version that just meets your current needs.

2. See your accounting costs as an investment, not as an expense

Most start-ups use a semi-qualified internal member or an over-worked part-time bookkeeper to keep their books. The perceived simplicity of popular accounting software further owners use semi-qualified bookkeeping help. These strategies can back-fire frequently and substantially! I have handled many such assignments where the expenses are all messed up and entered in hundreds of different accounts, assets are booked as expenses and owner’s personal expenses are mixed with business expenses. The effort and costs of this post-mortem correction is substantially greater then the time taken to create a new set of books.

A good set of books from the initial days goes a long way towards managing things when the big growth happens. They also help a start-up keep tab of its most precious asset- its cash-flows!!

The increased popularity of outsourcing accounting provides start-ups with a cost-effective and valuable tool to have their cake and eat it too-great accounting at an economical price.

3. Spend time with your accountant to chart out a good accounting system

Areas include creating a structured chart of accounts, establishing important internal sales, purchase, disbursements and expense reimbursement procedures. Setting up a chart of accounts is a very important accounting activity for a start-up. Poorly created chart of accounts with insufficient/duplicate/multiple expense accounts create a big head-ache (and a costly accounting prescription to fix it).

Plan out the revenue items and accounts, expense items and accounts(and sub accounts), and handling of credit card and merchant account transactions clearly. It helps to create a check-list and ask a lot of questions. For e.g. do you need to track freight along with cost of goods sold(a direct cost) or as a general expense(indirect cost), do you want to book rep commissions under sales or as expenses, do you want to track sub-contractor expense separately or under direct costs. You may have to go through a few iterations before you arrive at a good fit.

4. Don’t do yesterday’s accounting the day after!

Many start-ups handle accounting on a rewind/flash-back mode. They realize a few weeks/month before the tax-deadline that their books are only a set of papers and bank statements that have not been touched for quite some-time. This results in a last minute dash to book everything and somehow create a set of financials for the tax-preparer to work on. This hurried processing can result in costly omissions and errors. For e.g. expenses are hurriedly dumped in some general accounts with little memo/additional information keyed in. Many of these expenses could be tax-deductible but your tax-preparer wouldn’t know till he sees them!!. He is very likely to miss them in the maze of the general/dumping grounds(accounts).

5. Establish reporting signage in your business highway

Reports are like a dashboard in a car. They can serve multiple purposes. A Cash-flow report like a fuel gauge indicates when cash is running out, income statement like the speedometer tells us whether there is momentum in the business and balance sheet is like an odometer tells us the complete story so far!.. So have a good dashboard and look at it regularly as you drive along the business highway.

How to choose the right accountant for your business

An accountant is a specialist who tracks the financial records of a company or an individual. There are a variety of people and companies that utilize the services of a financial advisor all the time. There are other people who simply employ an accountant that can help get all of their financial resources in order prior to their income tax returns are due. There are millions of accounting professionals located all around the world. With numerous cities and also towns contending at least 10 expert financial advisors, it is often challenging for individuals to decide which accountant they need to work with. This article will show you how to choose the right accountant for your business.

Accountants can help

Accountants can help

The ways to choose a financial advisor for individual or business use is a fairly easy process. There are a number of elements that ought to be thought about, before the services of a financial advisor are in fact obtained. The best way to get started on employing an accounting professional is by discovering who these professionals are in your location. It is feasible to employ a financial advisor that is not situated in the same location as a specific or service; nonetheless, lots of individuals really feel that it is easier to work with a financial advisor that is locally situated.

There are a variety of ways that an individual or business could locate an accounting professional. One of the most preferred ways is through researching local newspapers and directories. Lots of expert accountants are noted in the regional phonebook or they advertise their company online. When using a telephone directory to find a financial advisor, individuals ought to look in the yellow pages or business directory of their phone book. Most of financial advisors are noted under the going of Accounting as well as Bookkkeeping Services. It is additionally feasible for an accounting professional to be located using an on-line company directory site. Online service directory sites work in the same way that a traditional phonebook does; nonetheless, they are often nationwide and often consist of responses from previous consumers. Comments ratings of a certain team may come in convenient when looking for a credible accounting professional to do service with. Lots of individuals additionally find a financial advisor by requesting for referrals from family members, good friends, and colleagues.

Personal referrals are a great method to learn about an accounting professional that is professional as well as highly recommendable; nevertheless, individuals and entrepreneurs are motivated not to just take the word of a person that they know. A large number of accountants provide complimentary assessments to the general public. Individuals and business owners are urged to make use of a cost-free consultation to know more about an accountant. If a cost-free appointment is not available, lots of expert accountants do not mind responding to a number of concerns over the phone or in an email.

The most important point to think about when seeking to decide on an accounting professional is their qualifications. They should have the necessary financial qualifications, whether they are bookkeepers or accountants. Furthermore, they need to be registered with their respective professional bodies, and be in good standing. It will also not hurt to ask for referrals, and actually making contact with these people, to find out how these professionals conduct themselves.

There are many accountants who handle a wide variety of case loads; however, there are some that only specialize in a specific area of accounting or manage a certain type of client. People and company owner are encouraged to speak with an accountant to determine if their services can be applied to their individual needs. There are many accountants who only specialize in personal accounting while others may only work with business owners.

It is likewise essential to determine if an accountant is working on their own or if they belong of a larger accounting team. While each could have their advantages it is possible that a big accounting company could suggest that a number of accounting professionals will be dealing with your finances. There are lots of people who only really want to work with one accountant rather of multiple accountants. Working one on one with a specific accountant often allows individuals to really feel like they are obtaining the proper amount of attention and it additionally develops much less confusion and also errors.

As previously mentioned learning how to choose an accountant is a fairly easy process once individuals or business owners known which type of questions to ask. Asking questions is the very best means to discover their certifications and the quantity of money that their services price. There is a perfect accountant out there for every individuals or business, it may just take a little bit of research to find him or her.

How an accountant can help your business today

If you’re beginning a new business, you would like to keep overheads to a minimum – funds could be strict at this important time, and also you need to understand just what’s crucial for your business and exactly what is not. Some individuals believe that it will certainly be easy to figure out their own funds, yet as your service expands, you can find it even more of a headache doing your bookkeeping by yourself, compared to paying a certified accountant to do them for you. Let’s see how an accountant can help your business  today.

Accountants will solve your business headaches

Accountants will solve your business headaches

Work with the Experts

Accountancy firms have years of experience in handling pay-roll, bookkeeping, tax returns and accounting, so it makes excellent sense to employ a certified financial advisor to assist you in keeping on top of your finances. For the newly self-employed, earnings tax could be a steep learning curve and also a little a shock to the system, but by using the solutions of a dependable book keeping company, you could be certain that you’re fulfilling your duties when it involves paying taxes. The majority of accountants will happily assist you on exactly what documents you have to keep and also could assist you with which standard bookkeeping software application you should use.

Keep your Records Online

It’s a good idea to make use of online accountancy software to maintain your invoices all set for your end of year income tax return. This way, all your billings as well as financial information are saved in one area, so when it’s time to visit your accountant, all you have to do is publish off the billings from your system and take them with you, in addition to other pertinent info. Software program such as Sage Bookkeeping as well as Freshbooks is offered to make use of online, and numerous of the basic bundles are complimentary, letting you amount to 3 customers at no charge.

What can an Accounting professional do for your service?

A trustworthy accounting firm will work with you to guarantee that you fully understand your tax ramifications as well as how much money you have to be keeping apart for tax. Most accountants are happy to work with you whether you’re an international company or a sole investor running a small bakery, and they will suggest you on the most effective way to manage your documents and finances. If you have any inquiries concerning tax obligations or accounting, your accountant will certainly agree to answer them, and any sort of respectable company will certainly enjoy to offer you with a charge quote upfront, before you take advantage of their solutions.

Conclusion

If you’re running a business of any kind, you truly can not manage to be without the solutions of a certified accounting firm – the advice, assistance and aid they offer is unrivaled, and also will certainly make being an entrepreneur a far more enjoyable and stress free experience.