1What is it?
Value-Added Tax is an indirect tax charged on the supply of goods and services. Once registered, you charge VAT on your invoices, claim VAT back on business purchases and submit VAT201 returns to SARS.
2Who needs it?
- Businesses whose taxable turnover exceeds R1 million in any consecutive 12-month period — registration is compulsory
- Businesses with a written contract that will exceed R1 million in the next 12 months
3Who doesn't need it?
- Providers turning over under R50 000 in the past 12 months — you may not register voluntarily
- Small operators who mainly serve households, where charging VAT makes you 15% more expensive than uncensored competitors
4Registration categories
Compulsory registration
Taxable supplies exceed R1 million in any 12-month period.
Voluntary registration
Taxable supplies exceeded R50 000 in the past 12 months.
5Why is it important?
Trading over the threshold without registering is an offence and SARS can recover the VAT you should have charged, plus penalties and interest. Registering also lets you claim input VAT on materials, tools and vehicles.
6Benefits
- Claim input VAT back on materials, tools, fuel and vehicles
- Required by many corporate and insurance clients
- Signals an established business to commercial procurement teams
7Step-by-step guide
- 1Confirm your 12-month turnover against the R1 million and R50 000 thresholds.
- 2Gather financial records showing turnover — invoices and bank statements.
- 3Apply on eFiling under SARS Registered Details, or make a branch appointment.
- 4Submit supporting documents including bank confirmation and proof of address.
- 5Attend a verification appointment if SARS requests one.
- 6Once your VAT number is issued, update your invoice template to a compliant tax invoice.
- 7Diarise VAT201 submissions — usually every two months.
8Supporting documents
- Proof of taxable turnover (invoices, bank statements)
- Bank confirmation letter in the business name
- Proof of business address
- CIPC documents and director IDs
9Costs
Government fees
Free.
Training costs
None required.
Other costs
Bookkeeping for bi-monthly VAT201 submissions, typically R500 – R2 000 per period.
10Expected turnaround time
Usually 10 – 21 working days, longer where SARS requires an in-person verification.
11Renewal requirements
No renewal. Ongoing VAT201 returns are due every tax period and deregistration must be applied for if turnover falls away.
12Official website
13Official contact details
- SARS Contact Centre: 0800 00 7277
- Website: www.sars.gov.za
14Frequently asked questions
Should I register voluntarily?
Only if most of your clients are VAT-registered businesses that can claim the VAT back. For household work it usually makes you more expensive.
Can I charge VAT before my number is issued?
No. You may only charge VAT from your effective registration date.
15How FIX IT verifies this
- You upload your VAT registration notice (VAT103) in the Business Centre.
- Our reviewer checks the VAT number, business name and effective date.
- The VAT number is stored on your billing profile so quotes and invoices generated by FIX IT display it correctly.