On 1 April 2026 one of the most significant small-business tax changes in years took effect quietly: the compulsory VAT registration threshold more than doubled, from R1 million to R2.3 million in taxable supplies over any rolling 12 months. The voluntary registration floor rose too, from R50,000 to R120,000. If your business sits anywhere near these numbers, it's worth five minutes of thought.
If you're under R2.3 million and not registered
You now have more room before registration becomes compulsory. That's simpler admin and, if you sell to consumers, a genuine pricing advantage — you're not adding 15% to your prices. Enjoy the breathing space.
If you registered under the old R1 million rule
This is the interesting group. You may now be below the compulsory threshold and eligible to deregister. Whether you should depends entirely on who your customers are:
- Customers are mostly VAT vendors (businesses)? Staying registered usually still wins — the VAT you charge costs them nothing (they claim it back) while you keep reclaiming input VAT on your costs.
- Customers are mostly consumers? Deregistering could effectively cut your prices by 15% or lift your margin — a real competitive lever.
There's also an exit cost to weigh: deregistering can trigger output VAT on assets you still hold. So it's a calculation, not a reflex.
The trap in the rolling 12 months
Remember the test is any consecutive 12-month period, not your financial year. A strong few months can push you over R2.3 million mid-year, and you then have just 21 business days to register. Watching this is a bookkeeping job, not a year-end surprise.
What we'd suggest
If you're near either threshold, get the numbers looked at before you decide anything. The right answer for your neighbour's business may be exactly wrong for yours. Our full VAT registration guide walks through the detail, or just talk to us.