A business that is not registered for VAT still issues invoices, and there are things it must not do. The most consequential is charging VAT, showing a VAT number or calling a document a tax invoice — none of which a non-vendor may do.
This page covers what a non-VAT business should put on an invoice, why proper invoicing matters even without VAT, and when the position changes.
Business Requirements at a Glance
What a non-VAT business should put on an invoice.
- The word “Invoice” — not “Tax Invoice”
- The business name and address, and the registration number where the business is a company
- The customer’s name and address
- A unique sequential invoice number and the date of issue
- A clear description of the goods or services supplied
- The quantity and the amount charged
- Payment terms and the business’s banking details
- No VAT amount and no VAT registration number
Registration and Legal Requirements
A non-vendor may not charge VAT. Adding an amount described as VAT to an invoice when you are not registered is an offence, and SARS can recover the amount charged. It also misleads a customer who may attempt to claim input tax on it, which produces a disallowance for them and a dispute for you.
Never show a VAT number you do not have. Customers verify VAT numbers, and a false one is a serious matter.
Your prices are simply your prices. A non-vendor quotes a single amount with no VAT component. That is often an advantage when selling to consumers, since a vendor competitor must add VAT to the same price.
Registration becomes compulsory once taxable supplies exceed the threshold prescribed in the Value-Added Tax Act 89 of 1991 over a twelve-month period. Monitor your rolling twelve-month turnover — this is the obligation small businesses most often discover late, and registering late means liability for VAT you never charged, plus interest and penalties. Confirm the current thresholds with SARS.
Voluntary registration is possible above a lower threshold, and it is a genuine decision rather than an obvious one: it allows input tax claims but adds filing obligations and raises your effective price to non-vendor customers.
Documents and Ownership Information Required
What a business needs regardless of VAT status.
- A registered entity, or a registered sole proprietorship, with a business bank account
- A SARS tax reference number for the entity or the individual
- An invoicing system producing sequential unique numbers
- A record of every invoice issued and every payment received
- Supporting documents — quotes, orders, delivery notes, contracts
- Records of all expenses with supporting invoices and receipts
- Retention of records for the period the Tax Administration Act requires
Tax, Licence and Compliance Requirements
Invoicing properly matters even without VAT. Income tax is assessed on the business’s profit, and a business without invoices cannot substantiate its income or its expenses. That is where an assessment goes badly.
Bank everything through the business account. Undocumented deposits are treated unfavourably on assessment, and a business whose income does not appear in an account has nothing to point to.
Records must be retained. The Tax Administration Act 28 of 2011 requires records supporting a return to be kept for the prescribed period from submission, and longer where an audit or dispute is open. That applies to every business, VAT registered or not.
Provisional tax applies to most businesses and to individuals with income other than remuneration. Confirm your obligation with SARS — missing a provisional payment attracts penalties and interest.
Small business tax regimes may apply. Small business corporation rates and the turnover tax regime each have their own qualifying criteria and exclusions. Confirm eligibility and the current thresholds with SARS, since they are specific and revised.
Get a tax compliance status PIN from SARS eFiling. Most business customers, tenders and funders require it, and obtaining it takes time if the entity is not compliant.
Free support exists. The Small Enterprise Development Agency assists small businesses with registration, compliance and record-keeping at no cost.
Process, Deadlines and Ongoing Obligations
Set up the invoice template correctly from the first invoice, with sequential numbering, and keep a copy of every one. Fixing a year of invoices retrospectively is far harder than getting the template right once.
Monitor your rolling twelve-month turnover against the compulsory VAT registration threshold every month, not annually. That single habit prevents the most expensive tax mistake a growing small business makes.
- Never charge VAT or show a VAT number unless registered
- Call the document an Invoice, not a Tax Invoice
- Use sequential unique invoice numbers from the first invoice
- Describe the goods or services properly on every invoice
- Bank all income through the business account
- Monitor rolling twelve-month turnover against the VAT threshold
- Weigh voluntary registration against your actual customer base
- Confirm your provisional tax obligation with SARS
- Check eligibility for small business tax regimes with SARS
- Keep all records for the prescribed retention period
Frequently Asked Questions
Can I charge VAT if I am not registered?
No. It is an offence, SARS can recover the amount, and your customer’s input tax claim on it will be disallowed. A non-vendor quotes a single price with no VAT component.
What should my invoice say instead?
“Invoice” rather than “Tax Invoice”, with your business details, the customer’s details, a unique sequential number, the date, a description, quantity and amount — and no VAT line and no VAT number.
When must I register for VAT?
Once taxable supplies exceed the compulsory threshold over twelve months. Monitor your rolling turnover monthly — registering late means liability for VAT you never charged, plus interest and penalties.
Do I still need proper records?
Yes. Income tax is assessed on profit, and a business without invoices cannot substantiate income or expenses. The Tax Administration Act retention rules apply regardless of VAT status.
Invoice requirements, VAT registration thresholds, tax regimes and retention rules are set in the VAT Act, the Income Tax Act and the Tax Administration Act and by SARS, and are revised. Confirm current requirements with SARS or a registered tax practitioner.