[Question] VAT on Damage Liability

[Moriarty]

Good Morning,

Whilst input vat is disallowed on vehicle rental, can input vat be claimed if the driver has an accident and a tax invoice is received for damage liability and administration fee?

Thanks.

[Andromeda]

Yes you can. I can't give you a reference, but you can claim the Vat on the insurance, damage, excess and accident administration charge.

[Moriarty]

Thanks Andromeda, I'd be grateful if anyone else can give a reference.

[Brett Nortje]

Good Morning,

Whilst input vat is disallowed on vehicle rental, can input vat be claimed if the driver has an accident and a tax invoice is received for damage liability and administration fee?

Thanks.

Well, vat comes into play when the 'infrastructure' has a part to play in the service or product. if the state is used, then there is value added tax, of course. now, you are using public roads to travel on, blocking them will be bad. you are using public ambulances potentially, so that may be a draw card against you.

Legally, if it has nothing to do with the state, there is no need for tax. of course, maybe there is some way that this twisted affair uses the state in some way, or, uses their time? maybe it is a police reporting matter, and requires time of these public servants.

If vat is claimed against you, i suggest getting in touch with a legal expert to discuss what it has to do with the state, and, if you persuade them, maybe you could make a case against them? maybe the laws will change, maybe you will make news... who knows? nothing wrong with a simple phone call!

[Andromeda]

Thanks Andromeda, I'd be grateful if anyone else can give a reference.

Moriarty it is best to look at it from the disallowed angle. Generally you can claim input tax charged to you, except when it relates to the acquisition of a passenger car. That exception was extended to the rental of a passenger car.

It is the acquisition that is not allowed, and not the subsequent related costs.

[Moriarty]

Much obliged.