Not VAT registered? Know what belongs in your costs

Registration changes the treatment

VAT and income tax are different taxes. A business that is not registered as a VAT vendor generally cannot deduct input VAT through a VAT return merely because a supplier charged VAT.

A non-vendor should not represent itself as charging VAT as a registered vendor. Check your actual registration status, including its effective date, rather than relying on the presence of a VAT amount on someone else's invoice.

VAT paid may form part of the cost

For a non-VAT-registered business, VAT paid generally forms part of the purchase cost. Whether that cost is deductible for income tax is a separate question: business purpose, private use, capital expenditure and other restrictions still matter.

For a VAT vendor, input tax recovery also has conditions and exclusions. A VAT amount shown on a receipt is not a guarantee that the full amount can be claimed. Keep the required evidence and ask your practitioner where the treatment is uncertain.

Keep your records aligned with your status

In Veld Tax Studio, check the VAT registered selection in Settings before reviewing your reports. Keep the original supplier document even when no VAT is claimable.

If you register later, do not assume all historical VAT becomes claimable or that older returns should change automatically. Effective dates, transitional rules and the facts of each purchase need professional review.

• Confirm your registration and effective date with SARS.
• Do not confuse an income-tax deduction with an input VAT claim.
• Have registration changes reviewed before filing.