Deregistered for VAT and now AFS shows turnover of over R1m - what now?

[J7J]

Hi all,

Has anyone encountered a situation where a entity deregistered for VAT because of turnover declining to less than a R1m and projected turnover also looking to be under R1m and then the entity had a better year than expected and ended up with turnover over a million after all? Do you then re-register for VAT from the period where things went better (in this case festive season) than expected and only pay VAT from those periods going forward or will SARS assess you for VAT for the entire period that you were not registered anymore?

Please advise.

Thank you!

[quick]

I would visit SARS with my banking statements proving the turnover is now over R1million for further instructions.
The vat registration would now be compulsory.

Jerry.

[bammer]

Hi all,

Has anyone encountered a situation where a entity deregistered for VAT because of turnover declining to less than a R1m and projected turnover also looking to be under R1m and then the entity had a better year than expected and ended up with turnover over a million after all? Do you then re-register for VAT from the period where things went better (in this case festive season) than expected and only pay VAT from those periods going forward or will SARS assess you for VAT for the entire period that you were not registered anymore?

Please advise.

Thank you!

If SARS is satisfied that you exceeded the R1m threshold solely as a consequence of "abnormal circumstances of a temporary nature", you are not liable to register for VAT (proviso (iii) to section 23(1) of the VAT Act). I am of the view that "the festive season" is not "abnormal circumstances of a temporary nature" and therefore, I am of the view that you are required to register for VAT within 21 business days (section 22(2)(a) of the TAA) calculated from the end of the month in which you exceeded the threshold (section 23(1)(a) of the VAT Act).

I have assumed that you did not enter into a written contract in terms of which you will exceed the threshold within a consecutive 12-month period.