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Thread: Claiming Input VAT

  1. #1
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    Claiming Input VAT

    Hi All,

    I would like some advice on the claiming of input VAT. I am employed by a NPO that rents out units to tenants in a specific income band. As such, we do not pay any output VAT on the rental. In addition, we sell Utilities (Water and Electricity) to our tenants, we do pay output VAT on these as well as some other items.

    My question relates to the claiming of input VAT... as an example we incur legal fees for tenants that we hand over for collection etc. These costs are then disbursed to the tenant and we pay the output VAT on the disbursement of that cost but we do not get the benefit of claiming the input VAT on the initial invoice from the Attorney, is this correct?

    The consultant that has been used for the past few year informs me that we can only claim inputs that relate to the supply of the Utilities, so can claim the input VAT on our Municipal Bills and any purchases of Electrical and Water Meters (as we use a prepaid system).

    I just feel that we are getting the short end of the stick as in another Organisation were I had worked all output VAT were exempt as they related to a government grant, there they had claimed all inputs from VAT vendors.

    Any assistance would be appreciated...thanks in advance.

  2. #2
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    Hi AtholP, I also believe that the vat on a legal fee incurred to recoup an exempt supply cannot be claimed. If you recoup those costs then that is a recovery of a legal fee and is subject to VAT.

    All that I can suggest is that the cost recovered should be the total cost to you; in other words the VAT inclusive amount, plus VAT.

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