2026 Compliance Update: VAT, Payroll, COIDA and SARS Changes Businesses Should Know

Tax season is not only about income tax.

For businesses, compliance is wider than that.

You may also need to think about VAT, payroll, PAYE, UIF, SDL, COIDA, Letter of Good Standing, CIPC, beneficial ownership and SARS notices.

That sounds like a lot, because it is.

But it becomes easier when you break it down and deal with each part properly.

VAT threshold changes in 2026

One of the important 2026 changes is the VAT registration threshold.

From 1 April 2026, the compulsory VAT registration threshold increased to R2.3 million in taxable supplies per year. The voluntary VAT registration threshold increased to R120,000 per year. SARS also notes that VAT deregistration is not always automatic and that businesses must continue accounting for VAT until registration is formally cancelled.

This change matters for small businesses.

Some businesses that previously had to register for VAT may now need to review their position. Other businesses may still choose to remain VAT registered because of clients, input VAT claims or future growth.

Should you register or deregister for VAT?

Do not make this decision based only on turnover.

Also consider:

Do your clients prefer VAT-registered suppliers? Do you claim input VAT on business expenses? Do you hold stock or assets where VAT may need to be accounted for on deregistration? Will your turnover increase again in the next 12 months? Does your pricing model depend on VAT? Will deregistration help or hurt your business?

VAT deregistration may sound attractive, but it can have consequences.

Get the facts before making a move.

Payroll: PAYE, UIF and SDL still matter

If you employ staff, payroll compliance is not optional.

Employers need to manage the correct deductions, submissions and reconciliations.

This may include:

PAYE UIF SDL EMP201 monthly declarations EMP501 employer reconciliations Employee tax certificates

SARS explains PAYE as tax that employers deduct or withhold from employment income and pay over to SARS.

That means payroll is not just an HR function. It is a tax compliance function too.

EMP201 and EMP501: do not leave them behind

EMP201 declarations are part of the regular payroll compliance cycle.

EMP501 reconciliations compare what was declared, what was paid and what was issued to employees on tax certificates.

When these do not match, it can create issues for the employer and employees.

Payroll mistakes can also affect staff when they file their own tax returns.

That is why payroll should be checked properly before tax season pressure builds.

COIDA and Letter of Good Standing

If your business employs people, COIDA may also apply.

COIDA registration and Return of Earnings submissions are important because they affect whether your business can obtain or renew a Letter of Good Standing.

A Letter of Good Standing is often needed for:

Tenders Supplier applications Contractor onboarding Construction-related work Corporate procurement requirements

If your COIDA records, payments or returns are not up to date, this can delay business opportunities.

That is why COIDA should be treated as a business compliance priority, not just admin.

SARS notices should not be ignored

If SARS sends a penalty, letter, verification request, final demand or compliance notice, respond properly.

Ignoring it usually makes the problem worse.

Depending on the matter, you may need to:

Submit supporting documents Correct information Request remission Lodge an objection Appeal Make a payment arrangement Check your SARS statement of account

The sooner you deal with it, the more options you usually have.

Simple compliance checklist for businesses

Use this as a starting point:

Are VAT returns up to date? Are PAYE, UIF and SDL submissions current? Has EMP501 reconciliation been handled? Is COIDA registration up to date? Is the Letter of Good Standing valid? Are CIPC annual returns up to date? Has beneficial ownership been submitted? Are SARS notices being monitored? Are tax and accounting records aligned? Are provisional tax payments reasonable?

If you are unsure about any of these, that is usually a sign to review your compliance position.

Final thought

The 2026 season is a good time for businesses to tighten up compliance.

Not because SARS says so, but because it protects the business.

Good compliance supports tax clearance, tenders, supplier approval, funding, payroll accuracy and better decision-making.

Small issues become expensive when they are ignored.

Not sure if your business is fully compliant? Tax Edge Consultants can assist with VAT, payroll, COIDA, SARS matters and practical business compliance support.

Tax Edge Consultants — Beyond Numbers. Ahead Always.