Input & Output VAT

[DaisyGirl]

Thanks Greg, I can wrap my head around the In (through the door) and Out (through the door) concept; just trying to see why what I owe is an Asset and what I can claim is a Liability! (Some of us just don't think like you accountant types :-)

[DaisyGirl]

... and Greg, thanks for that 05 Tax help, I completely missed that one. Big thanks!

[DaisyGirl]

Which code should Salaries & Wages go under? I've been using 00 but perhaps that's not right?

[greghsa]

Which code should Salaries & Wages go under? I've been using 00 but perhaps that's not right?

To claim (Tax Type 01) assuming that suppier/s are vat registered:
Accounting fees
Advertising
Bad Debts(Tax Type 04)
Cleaning Materials
Delivery Vehicles
Discount Allowed
Electricity & Water
First Aid expenses
Insurance
Legal Fees
Maintenance & repairs
Motor Vehicle Maintenance
Office Furniture & Equipment
Postage
Purchases fore resale
Security
Staff Training
Stationery & Printing
Subscriptions & Levies
Telephone, Faxes & Email
Toll Fees
Tools & Machinery

What not to claim (Tax Type 00)
Any personal expenses of owner
Car purchases
Depreciation
Donations
Entertainment
Interest
Medical Aid or Owner Medical Aid
Milk, Bread, Vegtables, Rice, Cooking Oil
Motor Vehicle licence
PAYE & SITE
Petrol & Diesel
Pension & Provident funds
Promotional Gifts
Salaries & Wages
Staff Tea & Refreshments
UIF
Any Vendor(Supplier) that is not registered for VAT.

[greghsa]

Thanks Greg, I can wrap my head around the In (through the door) and Out (through the door) concept; just trying to see why what I owe is an Asset and what I can claim is a Liability! (Some of us just don't think like you accountant types :-)

If you owe SARS it is a libility, if SARS owes you it is in asset.
Lets say you buy something for R50 + R7 VAT = R57
Now you sell it for R114 (R100 + R14 VAT)

Input R7
Output R14
Nett Effect is R7 Output (OUTput means you must pay OUT to SARS)
[If the net is Input SARS must pay IN to your bank account !]

Might get a bit technical here (Sorry)
Accounting Entries
DR Purchases R50
DR Vat R 7
CR Supplier R57

CR Sales R100
CR VAT R 14
DR Customer R114

Net effect of Vat is R 7 DR + R 14 CR = R 7 CR Therefore a liability