Content provided by a guest contributor.
It would seem that I am still on my “VAT Soapbox”, so here are a few more instances and situations that many folk don’t know about, where you can claim VAT back if the product/service has been used for business purposes.
1. Vehicle expenses
Many companies, that are sales driven and who employ a large number of sales representatives, have a situation where the staff either own their own vehicles, or the Company has a large fleet of vehicles for the employees to use. Improvements that are made to these vehicles (including the vehicles that are owned by the staff themselves), that are used for business purposes can claim the VAT back. Some examples of these improvements are (but not limited to):
- Tow Bar
- Air Conditioning
- Cruise control
- Radio/CD player
- Gear Lock
- Hands free phone kit
- Tracker (or similar tracking type device)
- Smash and grab window tinting etc.
Toll fees that are incurred during the course of staff business travelling can have the VAT portion claimed for. Obviously the whole transaction should go through the Company books, which would then have an impact on Company Tax.
Subscriptions to magazines, trade journals and associations that relates to your business can also be claimed for in terms of VAT. Flower arrangements for the reception rooms and offices can have the VAT portion claimed for. Of course, the flowers must be present on the premises if you are unlucky enough to have a SARS site inspection.
4. Transfer duties
Should you own a fixed property in your personal capacity, that you now start using for business purposes, the VAT portion of the transfer duties can be claimed for.
VAT on airplane tickets that were purchased for local business travel and please note the “local” in the business travel, as well as the accommodation and other expenses (such as food and drink) can all be claimed.
Remember though, if you are travelling for pleasure and claim everything as a business expense and SARS finds out about this – you will end up in the smelly brown stuff and in fact you may have charges of tax evasion and fraud levied against you and that is definitely not something that you want to go through.
My relationship with the VAT man is a great one because it is quite simply this – find out what you can claim for and claim for it, find out what you cannot claim for and don’t claim for it!
For me it is easier to remain within the letter of the law – that way I will not spend the rest of my life looking over my shoulder or waiting for someone to tap me on the back.
The content in this article is provided by Nikki Viljoen, an Internal Auditor and Business Administration Specialist, and the owner of Viljoen Consulting.
About Viljoen Consulting:
Viljoen Consulting is a specialist Internal Audit company. It was established to provide access to Internal Audit functions, primarily targeting the SMME market, that were previously only enjoyed by large companies and corporations who could afford an Internal Audit Division. Viljoen Consulting recognizes the absolute necessity for SMMEs to implement best practices in respect of policies, procedures, flows, controls and other preventative practices, thereby protecting the company from possible fraud and other related losses.
Viljoen Consulting‘s services include bookkeeping, internal auditing, small business start-up, business sophistication assessments, and legal compliance.
For more information, contact:
Tel: 083 702 8849