South Africa VAT Calculator for the move from 14% to 15%

With the recent announcement of VAT in South Africa changing from 14% to 15% on the 1st April 2018, it is important that you start looking at the new prices you will be charging. To help we have created a simple South Africa VAT Calculator where you can enter the current pricing and assess various options (do you bare the VAT increase completely, your client takes the full VAT knock or is there a combination?)

How the VAT Calculator works in comparing 14% to 15%

When you open it up you will have the following options

As is- VAT at 14%

In this area, you enter the product name and the current price (including VAT at 14%) in the blue cells i.e. the price your clients are already paying.

It will show the resultant price excluding VAT and the VAT amount at 14%.

Option 1- Keep the total price the same (you take the full VAT knock)

Option 1 shows what will happen if you keep the final price your client pays the same in the 15% and 14% environments. Effectively you are baring the full cost of the increase yourself.

It will show how much worse off you are compared to what you earned when VAT was 14%.

Option 2- Keep the VAT exclusive price and just increase VAT (client takes the full VAT knock)

Option 2 shows what happens if you keep what you earn the same (the VAT exclusive price) and you just add 15% to that price. In this case, your client is taking the full 1% increase in VAT rate.

It will show how much worse off your client is when paying VAT of 15% rather than 14%.

Final Decision- what are you going to do

Now that you have the details, you can decide how you are going to handle the change in VAT rate on the prices you charge.

You will see

• the current VAT exclusive price based on current 14%,
• you baring the full costs of VAT increase and
• client baring the full cost of the VAT increase.

You can then type into the blue cell the price you plan to charge (VAT excl) and see what the final price will be.

It will then show you the change in your income and the payment the client will make. Depending on your situation you may decide to:

• Charge the full increase in VAT to your client, or
• Take the knock on the VAT increase, or
• Share the VAT increase in some way.

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