If you registered for VAT because your turnover crossed a line, it is worth checking where that line is now. It moved back in April, and it moved a long way.
You may well not have heard, and that is not carelessness on your part. The announcement was written for accountants and the articles about it were written for people who already have one.
What changed
On 1 April 2026 the compulsory VAT registration threshold went from R1 million to R2.3 million.
The voluntary threshold went from R50,000 to R120,000.
At the same time the Turnover Tax threshold doubled to R2.3 million, with the first R600,000 tax free.
The VAT rate itself did not change. It is still 15 percent.
Why that matters to you
The R1 million line had not moved in about seventeen years, so it caught up with a lot of businesses that were not big by any normal measure. A one-person trade with a bakkie, materials and a busy year could cross it without ever feeling large.
If that is how you ended up registered, you may now be under the new line.
And being under it means you have a choice you did not have before.
Deregistering is a choice, not something that happens to you
Nothing happens automatically. If you are registered and you are now below the threshold, you stay registered until you apply to deregister.
So this is a decision, not an obligation, and there are real arguments on both sides.
Good reasons to stay registered
You claim VAT back on what you buy. If you spend a lot on materials, stock or equipment, that input VAT is money you recover. Give up the registration and you give that up too.
Bigger customers often expect it. Many larger companies prefer to deal with VAT-registered suppliers, and some tenders cannot be submitted without a VAT number. If a real share of your work comes from that kind of customer, being registered is part of being taken seriously.
It is a signal. Fairly or not, a VAT number reads to some people as a sign of a properly established business.
The catch, and read this one before you do anything
This is the part nobody mentions until afterwards.
When you deregister, you have to account for output tax on the assets you still hold at that moment. Your vehicle, your tools, your equipment, your stock.
For somebody with a bakkie and a workshop, that can be a large and very unwelcome number, and it arrives all at once.
There is provision to pay it off in instalments, but the amount does not go away.
So the arithmetic is not simply "less paperwork, therefore better". Work out what you would owe on the way out before you decide anything.
The other direction, and this one has a deadline
If you are not registered and your turnover has gone over R2.3 million in any twelve-month period, you are required to register, and there is a clock on it.
You have to apply within a short window once you cross. Miss it and SARS can backdate your registration to the date you became liable, which means owing VAT on everything you invoiced from that point, plus penalties and interest.
That is a genuinely bad outcome and it is entirely avoidable by checking your own numbers.
What to actually do this week
Work out your turnover for the last twelve months. Not your profit. Your total sales. If you have been recording your invoices properly it is a report rather than an afternoon.
Then, honestly, phone an accountant.
This is exactly the kind of decision where an hour of somebody's time pays for itself several times over. The threshold is simple. Whether deregistering is right for you is not, and it depends on what you buy, who you sell to, and what you own.
Anybody telling you the answer without knowing those three things, including this article, is guessing.
The other thing you might hear about
While you are reading about VAT, you will probably see something about SARS making electronic invoicing compulsory.
Short version: it applies to VAT-registered businesses, the largest taxpayers go first, the framework has not been published yet, and nothing is required of a small business this year. It is worth knowing about and it is not worth worrying about.
We are watching it closely and we will say something the moment anything actually changes for you.
KatisoBiz keeps your invoices and slips together all year, so working out your own turnover is a report rather than a weekend. Free for your first ten documents a month.