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VAT 101 – Some of the requirements – Part 2

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Please note that this pertains to South African VAT (Value Added Tax) and Best Practice requirements.

Last time we looked at a number of expenses that most people think they cannot claim on. Here are some more.

If you hire a car for business purposes, then you are entitled to claim the VAT on the insurance that you are required to take out on the vehicle. Be sure to get an invoice that lists the insurance, or itemizes it separately, this will make it much easier for record-keeping purposes.

Should one of your staff fall ill at work or get hurt in an accident whilst they are at work and the medical expenses are paid by the company, the VAT on these medical bills can also be claimed back.

Parking fees – now here is one of my favorites. Do you know how much we spend on parking in the malls and in office park complexes – it’s frightening! Parking fees, particularly fees that are paid, while working, that have VAT charged on them (in other words Tax Invoice should appear, somewhere on the receipt, and yes you have to have a receipt to claim the VAT back), can be claimed back. Most malls
have those ‘pay machines’ that actually give out receipts – be sure to request and submit those receipts. Obviously, monies that are paid out to the ‘car guards’ cannot have the VAT claimed for, but you can, of course, claim them as a business expense as long as they are “reasonable” and it is always better to be able to substantiate them. I use my diary as a guide when I paid the car guards.

When you send wreaths or flowers to staff or customers who have had a death or bereavement in their families, you can claim the VAT back.

In terms of postage stamps and postage, the VAT portion of this too can be claimed back provided of course that the postage is being used for business purposes.

Artwork, in the form of carpets or paintings and pictures or even plants, can have the VAT claimed for, provided of course that they were actually purchased for the office. Here’s the thing though – they have to physically be in the office. Understand that if they are not in the office and the VAT man comes to visit, you could be in the deep brown smelly stuff.

Remember, if you’re not sure whether you can claim the VAT back on anything give SARS a call and ask the question. Always get the name of the person you spoke to and keep a record of what you asked and the response as well as the date and time of the query.

Next time we will look at a different topic.