As South Africa gears up for VAT changes in 2025, many in the tourism and accommodation industry are asking: how do we prepare, and how does the VAT change impact bookings made for future stays? It’s never fun to think or talk about taxes, but paying taxes means you’re earning income, and that’s a good sign.
What are the VAT Changes
The upcoming VAT increase in South Africa, from 15% to 15.5% on 1 May 2025, does mean some administrative changes are needed. Should VAT change again, it’s also worth documenting the changes. Considering these points helps you be as prepared as possible and highlights the importance of integrating technology that does the bulk of the heavy lifting for you.
Let’s break it down in plain terms,
7 points to consider.
- Update Pricing. Consider how you want to adjust your pricing to add on the new VAT rate. Do any of your sales brochures, menus or rate sheets mention VAT? At present, as it is 0.5%, not everyone is going to modify their pricing, but if you are, then it’s a good idea to get organised now, so all that is left is to alter those from 1 May. At NightsBridge, we will let you know what you can check to ensure you are compliant, and switching over will be a quick exercise!
- Communicate with Guests. Inform your guests about the change in VAT and how it might affect their bookings, especially if you’ve already quoted prices or taken bookings for dates after 1 May. Transparency builds trust and helps manage expectations. READ: Expert Tips to make your guest reviews work harder for you
- Review Contracts and Agreements. Check whether the VAT increase affects the pricing if you have long-term bookings or agreements. Update those terms if necessary. From within NightsBridge, by using our systems, we will do a lot of the heavy lifting for you, but on your side, you need to check your compliance. You can do this by following the helpful guide sent to you closer to the day when you can take action.
- Update Accounting Systems. External accounting software or systems generally auto-update to correctly calculate the new VAT rate if your region is set to South Africa. However, if you haven’t been notified by now, you should check this. Doing this helps you stay compliant and avoid errors that are often more expensive to fix than to avoid. READ: NightsBridge integrates with Xero
- Different Tax Time Frames. Things can get tricky when you’ve taken a deposit before 1 May, but the guest only stays after that date. In most cases, VAT applies when the service is delivered — meaning when your guest is at your property. If your VAT returns are based on when money goes into your account, this may not affect you much. If a refund comes into play, that timing becomes more important.
- Train Staff. If you have employees handling bookings or finances, make sure they understand the changes and how to apply the new VAT rate. It is always helpful to be hypervigilant over the next couple of months to also check those processes.
- Consult a Tax Professional. If you’re unsure how the VAT increase impacts your business or how to claim back the VAT you pay against the VAT you charge, it is essential to seek advice from a tax consultant or accountant. They can provide tailored guidance based on whether you are near the tax threshold. This is another budget point being debated, so watch this space.
In the meantime, as a NightsBridge client, keep an eye on your inbox for additional help from NightsBridge. We will guide you through the changes in your software, where applicable.