When we include a % that is deemed personal use of the cellphone account of an employee on his payslip as a fringe benefit (say 10%), do you include 10% of the VAT exclusive amount or 10% of the VAT inclusive amount? Can we claim 100% of the VAT on the invoice as an input, or can you only claim the 90% that is for business use?
Let's use some numbers to illustrate the question:
The employee's cellphone account is R500 per month ex VAT, R570 incl VAT.
1) Do I include R50 or R57 as a fringe benefit on his payslip
2) Can we claim R70 as input tax or only R63?
3) Does the 90% of the cellphone account that is not included on his payslip, ie. R450, then go to telephone expenses on the income statement?
4) How do you calculate the output VAT that is payable on this fringe benefit?
Thank you for your input!