You have to have been registered for VAT at the time to be able to claim Input VAT incurred at that date during the past 5 years. To solve niggling problems like that, you could purchase in your own name until the business is large enough to register for VAT. Lease the equipment to the business for an amount more or less equal to the annual depreciation so you don't show a profit in your personal capacity. When the business registers for VAT, sell it to the business as second-hand goods issuing a VAT264 as the source document. You will sell it at market value and not at the original cost price but that way you get the equipment etc. in the business' name and you get to claim some VAT back in terms of Section 20(8) of the VAT Act. If you're going to pay from the business' account, be sure to have a loan agreement in place to prove that the business purchased on your behalf. Journal entries alone won't suffice to prove the underlying intention. SARS may cotton on to this and bring in new legislation to close this loophole but hey, the law is there to be followed as it is at the time.
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