Good Morning,
As we face the beginning of another week under lockdown I thought I would bring some clarity to the temporary VAT period relief on offer from SARS. This was touched on in the last general newsletter but now has been put forward as a draft bill which we don’t expect to be changed.
SARS has made a provision to permit vendors who are currently required to submit VAT returns bi-monthly, to temporarily file their returns on a monthly basis, thereby enabling you to submit your company’s VAT refunds more frequently and unlocking any refunds due to you faster.
The purpose of such a measure is to assist your business with liquidity in a time where business activity is likely to see an unprecedented decline. The benefit of the measure is to facilitate some level of cash flow relief that could enable your businesses to sustain itself.
The proposed amendments are deemed to have come into operation on 1 May 2020 and relate to the tax periods beginning 1 April 2020 and will remain in operation until the tax period ending the end of July 2020. Thereafter you will submit your VAT returns as normal every 2 months.
For example, if you are on a two monthly return which is due to be submitted at the end of June (Based on April and May trading) and you have little or no trading due to COVID-19 it would probably assist your cash flow to submit the April trading figures at the end of May. You should assess this and if it holds true, you should take advantage of this relief mechanism. If your business is operating at full capacity then there would probably be little reason unless you had made significant capital purchases.
If you need further guidance in this respect you are welcome to contact myself or Devasha for assistance.
Derane Pillay
MRM Practice Manager
