The looming VAT increase, due to be implemented on the 1st April will impact retailers, especially those that use paper price tags. This according to a spokesperson from NEC XON Retail, which supplies Electronic Shelf Labels to large retailers like Pick n Pay, SPAR, BP Express and other retailers.
Larger retailers who have to update between 30 000 to 40 000 labels per store can do so quite easily with electronic systems but smaller retailers that still use paper price tags, will have to ensure that every single price in their stores, which could be as much as 10 000 items, change overnight to reflect the new VAT. The cost implications of new labels and extra staff to do the change-over will impact small businesses.
According to the website www.thevatlady.co.za, here are five tips about the VAT increase:
- According to the date the goods are actually delivered or made available for collection. While prices advertised are deemed to include VAT, SARS says they understand that some vendors may have difficulty changing systems and things. Vendors will be allowed to advertise or mark their prices as excluding VAT, BUT must display signs in prominent places that this is the case. They are allowed to do this till the 31st May 2018.
- If you submit 2 monthly VAT returns and your VAT return covers the March/April tax period, SARS says they will produce a VAT return that sees to this problem. They don’t say yet how it will look, just that more information will be communicated.
- You may not claim 15% VAT on expenses or purchases on which 14% VAT has been charged! Remember to check your tax invoices from your suppliers to ensure they have charged you the correct rate of VAT!
- If your supplier charges you 14% VAT after 1 April 2018, then you are only entitled to claim the 14% and not recalculate and claim 15%. So ensure your suppliers get it right!
- You MAY adjust your prices to cover the VAT increase, but SARS doesn’t say that you must!