Top 5 Things SARS Expects From Your Small Business in 2025

Let’s be real — taxes can feel intimidating and stressful (to say the very least)

You start a business to do what you love, not to stress over tax forms, deadlines, and confusing terms.

But what if we were to tell you… SARS isn’t out to get you.

They just expect your business to tick a few important boxes.

And when you know what those boxes are (and stay on top of them) it’s actually pretty simple.

Here are the 5 key things SARS expects from every small business in South Africa; whether you’re a one-person show, a startup, or an established company.

1. Your business MUST be registered for income tax

The moment you register your company with CIPC, SARS automatically generates a tax reference number for you.

This tax number is completely separate from your personal tax number, as your business is its own legal entity with its own tax responsibilities.

What SARS expects:

Your business has an active tax number.
You’ll use this number for all tax submissions, payments, and correspondence with SARS.

Pro tip: When you register your company with Govchain, we handle this for you, you’ll get your company tax number fast, without dealing with SARS queues or paperwork.

2. You MUST submit tax returns every year (even if you make no profit)

It doesn’t matter if you made R1 or R1 million, you still have to file tax returns for your company every year.

Yes, even if…

Your business didn’t trade.
You made no sales.
You made a loss.

SARS still expects a submission. It’s your way of telling them:

“Hey, I’m compliant.”

“Here’s how my business did this year.”

What happens if you don’t submit?

SARS issues administrative penalties (up to R250 per month) every month, until you file.

… Plus interest, and possible further legal action if ignored.

When is it due?

A company must submit 3 times a year.

First provisional tax return - due 6 months after your financial year-end (IRP6)
Second provisional tax return - due on your financial year-end (IRP6)
Income Tax Return - due within 12 months of your financial year-end (ITR14)

The dates are based on the company's selected financial year end, most companies opt to use February as their financial year end.

Pro tip: Even dormant companies (zero trading) must submit a ‘dormant’ or ‘zero’ return to avoid penalties.

3. You might need to register for VAT

SARS doesn’t require VAT registration for every business.

Here’s how it works:

If your total sales hit R1 million in any rolling 12-month period, VAT registration becomes compulsory.
You must start charging 15% VAT on invoices.
You’ll then submit VAT returns every two months.

Optional VAT registration:

You can voluntarily register for VAT before you hit R1 million.
This is helpful if you work with VAT-registered clients (like corporates or government) who prefer VAT invoices.

What happens if you ignore VAT registration?

SARS will backdate the VAT, so you could owe 15% on all past sales, plus penalties and interest.

4. You must pay provisional tax

Provisional tax is the one that catches most small business owners by surprise.

How provisional tax works:

Pay twice a year:

End of August (first payment)
End of February (second payment)

These payments are based on an estimate of your taxable income for the year.

Then, when you submit your final tax return, any differences are settled.

Even if you made no profit?

Yes. You MUST submit a ‘nil’ provisional tax return. No tax is due, but SARS still expects the paperwork.

What happens if you skip provisional tax?

You’ll face late payment penalties and interest.
Plus, a nasty surprise tax bill at year-end.

5. Keep clean, accurate financial records (SARS can check anytime)

This isn’t optional. SARS expects you to keep proper records for at least five years.

What kinds of records?

Sales invoices (proof of what you sold)
Expense receipts (everything you claim as a business deduction)
Bank statements (both business and related transactions)
Payroll records if you have employees (PAYE, UIF, etc.).
VAT records if you’re VAT registered.

Why it matters:

SARS can request an audit anytime, even years later.
Without records, you risk penalties, denied deductions, and serious stress.

Pro tip: If bookkeeping isn’t your thing, Govchain offers affordable bookkeeping and tax services to keep you compliant without the admin headaches.

Bonus: What if you hire staff?

SARS expects you to:

Register for PAYE (Pay As You Earn), so you deduct tax from your employee’s salary.
Register for UIF (Unemployment Insurance Fund) and COID (Workman’s Compensation).
Submit monthly EMP201 returns and pay SARS.
Submit bi-annual EMP501 reconciliations.

If you skip this… SARS, the Department of Labour, and COID will all come knocking with penalties, interest, and potential legal consequences.

How to stay compliant

It sounds like a lot, but you don’t have to do it alone.

Govchain handles:

Company registration + SARS tax number
Tax returns (annual and provisional)
VAT registration
PAYE, UIF, COID setup
Bookkeeping and compliance

We’ll be your admin partner, so you can focus on growing your business, not drowning in paperwork.

When you’re compliant, your business is protected. No scary penalties. No stress. No nasty surprises.

Register your company with Govchain. We’ll help you get compliant with SARS, stay organised, and build your business the right way from day one.