Page 1 of 2 12 LastLast
Results 1 to 10 of 16

Thread: Vat on vehicles

  1. #1
    New Member
    Join Date
    Oct 2009
    Location
    KZN, South Africa
    Posts
    3
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Vat on vehicles

    Hi there,
    I have a question that I need some advice on.
    If a company (CC) purchases a caravan for the private use of it's owner. Can the company process the VAT thorugh its books on this caravan?

    Thanks
    Wendy

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,980
    Thanks
    3,055
    Thanked 2,463 Times in 2,068 Posts
    Blog Entries
    12
    How is the caravan going to be applied in the generation of output VAT?
    The trouble with opportunity is it normally comes dressed up as work.

  3. #3
    Bronze Member
    Join Date
    Mar 2009
    Location
    Johannesburg
    Posts
    175
    Thanks
    7
    Thanked 88 Times in 58 Posts
    Quote Originally Posted by wendymend1 View Post
    Hi there,
    I have a question that I need some advice on.
    If a company (CC) purchases a caravan for the private use of it's owner. Can the company process the VAT thorugh its books on this caravan?

    Thanks
    Wendy
    Although you pay Vat on the purchase, you CANNOT claim the Vat. No Vat is allowed on vehicles for private use. In fact you cannot even claim vat on passenger vehicles for BUSINESS USE. Only Trucks and Bakkies. Four door bakkies are also NOT Vat deductible(passenger vehicle). You mentioned private use, so SARS would not even look at your case.

    Maybe, just maybe.. if the caravan can be used solely for business use(office for instance), you can claim it, on your books, as a business asset/expense.
    Sean Goss We all are scared, but only few are brave.
    www.sgafc.co.za

  4. Thanks given for this post:

    Dave A (12-Oct-09)

  5. #4
    Platinum Member Marq's Avatar
    Join Date
    May 2006
    Posts
    1,296
    Thanks
    73
    Thanked 283 Times in 216 Posts
    A caravan looks like a portable office to me. How about a site office for your new operation in the berg. The new one where you are developing plans for schemes on tax avoidance. Not evasion, mind you just avoidance and at the same time you have to develop a plan for a plan to make a plan for your business in the berg. Just like they do in the goberment.
    The cost of living hasn't affected its popularity.
    Sponsored By: http://www.honeycombhouse.com

  6. #5
    New Member
    Join Date
    Oct 2009
    Location
    KZN, South Africa
    Posts
    3
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Thanks guys for all the advice on my question.

    As the carvan isn't going to be used for business purposes.
    Would it be correct to say that I can't show any VAT (input or output) in the books?
    The caravan would be added as an asset but with no VAT?

    Thanks again.
    Last edited by wendymend1; 14-Oct-09 at 08:03 PM.

  7. #6
    Bronze Member
    Join Date
    Mar 2009
    Location
    Johannesburg
    Posts
    175
    Thanks
    7
    Thanked 88 Times in 58 Posts
    You will disclose it inclusive of Vat. If the caravan was R50 000 plus R7000 vat for instance. The cost you bring the asset in, would be R57 000.00.

    Good Luck
    Sean Goss We all are scared, but only few are brave.
    www.sgafc.co.za

  8. #7
    New Member
    Join Date
    Dec 2009
    Location
    CT
    Posts
    1
    Thanks
    0
    Thanked 0 Times in 0 Posts
    and how does it work for car rentals? I want to buy 10 new cars for my car rental business - can I claim the VAT? Thanx!

  9. #8
    Silver Member geraldenek's Avatar
    Join Date
    Jul 2008
    Location
    Somerset West
    Posts
    229
    Thanks
    19
    Thanked 112 Times in 80 Posts
    Quote Originally Posted by sunny View Post
    and how does it work for car rentals? I want to buy 10 new cars for my car rental business - can I claim the VAT? Thanx!
    Hi, yes you can claim the vat on the vehicles and it will still be classified as an asset in the financials.
    Last edited by Dave A; 10-Jan-10 at 09:37 AM.

  10. Thanks given for this post:

    Dave A (10-Jan-10)

  11. #9
    Silver Member
    Join Date
    May 2006
    Location
    Houston
    Posts
    361
    Thanks
    51
    Thanked 41 Times in 32 Posts
    As the caravan is for private use, it should not appear in your books at all, and if paid for through company assets ie. business funds, must appear as "drawings" for owners or directors, and site/paye tax paid in your personal capacity as if the figure is an earnings.

    You would have to have clear evidence that the caravan was essential to conducting your business before it could be included as a company asset.
    Might be different for a CC?

    Either way, it is better for you in your personal capacity to be the "owner" of the asset.

    Yes, without question, don't pay tax on anything that is legally deductible, but there is a fine line between possible tax avoidance and tax evasion!

    Just a small bit of advice to anyone considering owning their own business:

    If anyone has the idea that one of the advantages is the ability to avoid any taxes, in almost every case, it will be evasion of taxation, rather than avoidance, right now there are very few instances of benefits to owning your own business from a taxation point of view! Yes! I know - high finances perhaps, but for the "ordinary" man in the street small business, it is very difficult to find benefits which are worth the chance of having the SARS disagree with your deduction!
    Just study the taxation on "use of a company vehicle" etc.

    Yvonne

  12. #10
    New Member
    Join Date
    Jun 2010
    Location
    Durban
    Posts
    4
    Thanks
    0
    Thanked 0 Times in 0 Posts

    vat on vehicles

    Hi there,

    Understanding the vat claiming on vehicles, vat claims are not allowed on motor vehicles when purchased by a vat vendor.

    However, when vehicles is a main source of income, i.e. the armed response industry. Sure we do not claim the vat on the purchase of the vehicle, however are you allowed to claim the vat on the running costs of the motor vehicle: maintenance, insurance, repairs, etc.

    Best regards
    A

Page 1 of 2 12 LastLast

Similar Threads

  1. [Question] Mandetory VAT Registration - In Trouble
    By Michael in forum Tax Forum
    Replies: 4
    Last Post: 04-May-09, 02:40 PM
  2. Amended Vat threshold 1 March 2009
    By Sieg in forum Tax Forum
    Replies: 10
    Last Post: 03-Mar-09, 09:10 AM
  3. Changes to VAT registration process
    By CharlesM in forum Tax Forum
    Replies: 8
    Last Post: 08-Nov-08, 09:42 PM
  4. Reimbursing travel expenses and VAT
    By duncan drennan in forum Tax Forum
    Replies: 2
    Last Post: 15-Oct-08, 04:58 PM
  5. Vat claim on pre vat registration
    By vamily0804 in forum Tax Forum
    Replies: 4
    Last Post: 10-Oct-08, 04:14 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •