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A Fin24 user wants to know if he must apply for two VAT numbers for two separate businesses. He writes:
I have two businesses in my name, not CCs or Ptys.
Will the turnover of the two businesses be added together for VAT purposes, or does the R1m cap for VAT registration apply to each business?
What is the minimum age for owning a business?
Christo Botes, executive director of Business Partners, responds:
Yes. In determining whether the threshold of R1m has been reached, the turnover of both businesses must be added together.
If you find that registration is compulsory, there can be one VAT number for both businesses.
If you can prove that you have separate accounting systems and the businesses can be separately identified based on the nature of activities or location, you can obtain two registrations (i e two VAT numbers).
For further clarity, Tienie le Roux of Business Consult referred the Fin24 user to the VAT guide, stating that he will have to register for VAT as soon as his businesses have reach R1m per annum in turnover.
I refer you to paragraph 2.7 on page 17 of the Value-Added Tax Guide for Vendors on the South African Revenue Service website. It reads as follows:
“It is important to note that a person who operates several enterprises, or who operates an enterprise in branches or divisions cannot avoid the liability to register for VAT by considering the turnover of each branch or division individually.
"In such cases, the turnover of all the enterprises/divisions/branches must be added together to determine the total value of the supplies.”
There is no minimum age for starting a business, but consider this:
To start your own business, you would first have to do your research and practice due diligence before drawing up a comprehensive business plan.
This will help map out your business strategy, give you an indication of the profitability of that business and offer you and those who might invest in your business an indication of how successful it is likely to be.
Then there is the financing aspect. You could use your own money, borrow from family and friends, ask the bank for money or get private funders.
You also need to consider all the administrative tasks.
The question should be: are you mature enough to start your own business?
- Fin24
Share your experience of setting up your own business and get published, or simply ask a question. Our business panel can put you on the right path.
I have two businesses in my name, not CCs or Ptys.
Will the turnover of the two businesses be added together for VAT purposes, or does the R1m cap for VAT registration apply to each business?
What is the minimum age for owning a business?
Christo Botes, executive director of Business Partners, responds:
Yes. In determining whether the threshold of R1m has been reached, the turnover of both businesses must be added together.
If you find that registration is compulsory, there can be one VAT number for both businesses.
If you can prove that you have separate accounting systems and the businesses can be separately identified based on the nature of activities or location, you can obtain two registrations (i e two VAT numbers).
For further clarity, Tienie le Roux of Business Consult referred the Fin24 user to the VAT guide, stating that he will have to register for VAT as soon as his businesses have reach R1m per annum in turnover.
I refer you to paragraph 2.7 on page 17 of the Value-Added Tax Guide for Vendors on the South African Revenue Service website. It reads as follows:
“It is important to note that a person who operates several enterprises, or who operates an enterprise in branches or divisions cannot avoid the liability to register for VAT by considering the turnover of each branch or division individually.
"In such cases, the turnover of all the enterprises/divisions/branches must be added together to determine the total value of the supplies.”
There is no minimum age for starting a business, but consider this:
To start your own business, you would first have to do your research and practice due diligence before drawing up a comprehensive business plan.
This will help map out your business strategy, give you an indication of the profitability of that business and offer you and those who might invest in your business an indication of how successful it is likely to be.
Then there is the financing aspect. You could use your own money, borrow from family and friends, ask the bank for money or get private funders.
You also need to consider all the administrative tasks.
The question should be: are you mature enough to start your own business?
- Fin24
Share your experience of setting up your own business and get published, or simply ask a question. Our business panel can put you on the right path.
