Should You Register for VAT?

Last updated 21 Jun 2026Reviewed 21 Jun 2026

VAT in South Africa is charged at 15% (the 2025 and 2026 hikes were both reversed). From 1 April 2026 you must register for VAT once your taxable turnover passes R2.3 million in any 12-month period, the first change to the threshold in 17 years. Voluntary registration is open from R120,000 of taxable turnover. Below R120,000 you cannot register at all.

The decision is not only about the threshold. Registering lets you claim back the 15% input VAT your suppliers charge on materials and subcontractors, but it also adds 15% to your prices, two-monthly returns, and a hard SARS verification process on refunds. The table compares the three positions on the points that change your cash and your pricing. Editorial guidance only, not tax advice. SiteKiln takes no referral fees.

At a glance

Option	Turnover threshold	Admin burden	Price to non-VAT clients	When it makes sense
Not registered	Under R120,000	Lowest	Cheapest	Mostly private homeowner clients
Voluntary registration	From R120,000	Medium	15% dearer	Mostly business clients who reclaim VAT
Compulsory registration	Over R2.3 million	Highest	15% dearer	Forced once turnover passes R2.3m

Compared in detail

Not registered

Best for: Homeowner work, turnover under R120,000

Pros

Your prices are 15% lower than a registered rival on the same job
No VAT returns, no two-monthly filing, no SARS refund verification
Simplest possible admin

Cons

Cannot add VAT to invoices
Cannot claim back the 15% input VAT on your materials and subbies
Compulsory only allowed above R120,000 of taxable turnover; below that you cannot register

Voluntary registration

Best for: B2B work once over R120,000

Pros

Claim back input VAT on materials, tools and subcontractors
Looks established to business clients who expect a VAT number
Neutral price to VAT-registered clients, because they claim your VAT back

Cons

Adds 15% to your price for clients who cannot reclaim it
Two-monthly VAT201 returns and full tax-invoice rules
SARS verifies refunds hard; a supplier invoice missing a VAT number kills the claim

Compulsory registration

Best for: Any business over R2.3 million turnover

Pros

Required by law, so the decision is made for you
Full input VAT recovery on all business costs
Standard for larger contractors and main-contractor supply chains

Cons

Must register within 21 business days of crossing R2.3 million
Same 15% price effect on any non-registered (homeowner) clients you keep
Two-monthly returns, banked VAT must be ring-fenced as it is SARS money passing through

Our pick

Our pick depends entirely on who your clients are. The single biggest factor is whether you sell mostly to VAT-registered businesses or mostly to private homeowners.

It depends on X: if most of your work is for VAT-registered clients (developers, main contractors, other companies), they claim your VAT back, so registering voluntarily once you pass R120,000 is usually worth it. You recover input VAT on materials and your price is effectively neutral to those clients. If most of your work is for private homeowners who cannot claim VAT back, registering makes you 15% more expensive than an unregistered rival on the same job, and the input claim rarely makes up for it, so stay unregistered until you are forced to register at R2.3 million.

Above R2.3 million the choice is made for you: registration is compulsory within 21 business days of crossing the line, and the input claims and admin come with it whether they suit you or not. One catch from SARS: tradies registered under the old R1 million threshold do not fall out automatically when they drop below R2.3 million, so deregistering is a separate decision to take with your accountant.

SiteKiln does not receive referral fees, affiliate commission or kickbacks from any provider listed. This is editorial content. If a better option exists, tell us at hello@kilnguides.co.uk.

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