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Thread: VAT: Small assets < R7k purchased - Is this capital expenditure or not?

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    VAT: Small assets < R7k purchased - Is this capital expenditure or not?

    Hi,

    Small assets (ie. printer) purchased for less than R7k and directly expensed for income tax purposes... Does this count as capital expenditure for VAT purposes or not?

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    It is still a capital expense, but as you stated correctly due to the cost it can be written off in full in the year. If you are a VAT vendor you can still claim VAT on it - is that what you are wanting to know?

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    Hi. Thank you for your response. No, I want to know whether I should complete this under Capital Expenditure on the VAT201 or under other expenditure (not capital).

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    i can't find something in the vat act, but i guess you can classify it under capital as the small assets is only applicable to the wear and tear part of the income tax and only came into effect in 2006.
    Geraldene Kapp
    Professional Tax Help
    www.mytaxhelp.co.za

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    Quote Originally Posted by geraldenek View Post
    i can't find something in the vat act, but i guess you can classify it under capital as the small assets is only applicable to the wear and tear part of the income tax and only came into effect in 2006.
    Thank you. So it doesn't really matter where you fill this in on the VAT 201? What do you do in your practice?

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    You should treat it on the VAT 201 in the same manner as you do in your books, therefore capital.

    If you get it wrong on the VAT 201, it's not the end of the world, but it will make your life a misery when you have to complete an IT14 SD in due course, which is just about a certainty.

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    Thank you. If I request a correction of the VAT201, as I completed it under other expenditure (not capital), what is the process?

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    It is capital expenditure.

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    Quote Originally Posted by J7J View Post
    Thank you. If I request a correction of the VAT201, as I completed it under other expenditure (not capital), what is the process?
    If you go to returns history and click on the relevant one, the VAT201 WORKS screen is displayed. Below the return are the buttons Query Status, Request Correction and more. Just click on request correction and complete it as it should have been (in other words not just differences)

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