Hi All. I am new to the forum and to having my own business, so please bear with the mewbie questions
I am a consultant in the engineering field and have registered a cc but am not yet VAT registered. My client's don't loose out on VAT since our rates are always quoted "ex VAT" and I am thus 14% cheaper than my VAT registered counterparts.
What I wish to know is exactly which expenses I may claim back if I were VAT registered? I keep hearing of people claming the VAT back that they pay on EVERYTHING they buy! Car installments, fuel, maintenance, home appliences, office furniture, entertainment etc.... etc... etc... and that the benefits they recieve from claiming VAT back apparantly actually saves them alot of money. Is this possible (legally )
For example my greatest asset is my laptop. If I purchased it for R10 000 (excl. - R11 400 incl) then would I be able to claim back the R1400 VAT that I paid? I am not planning to sell it to make a profit, but I use it to do my work. The same could apply to vehicle costs, services maintenace and entertainment etc. If I add all the VAT paid for these "business related" expenses, then could I not reach a state where I am claiming back more VAT from my expenses than I am paying for the work I am selling? Would this not then save me money? It would however indicate that no value has been added by my work!
I, personally, have stayed away from registering for VAT to keep things simple(The company was only registered this year) . Am I perhaps making a mistake?
Thanks for your input.