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    Gold Member Mark Atkinson's Avatar
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    Hi Ice,

    Perhaps I can help you.

    With regard to expenses, to my knowledge all general expenses in respect of the property you are running the business from can be apportioned to the business according to the floor area of the business in relation to the floor area of the property. For example, your bond, if your office takes up 10 square metres and your property is 50 square metres, you could apportion 10/50 = 20% of your bond to the business.

    For expenses such as telephone bills and and travel allowances, where the phones or vehicles are being used for both business and private usage, specific records need to be kept in order to claim the business portion.

    This is looking at it from a taxation point of view. It's essentially the same for accounting records when splitting your private and business expenditure. Any expense which you incur for the business can be recorded as an expense in your accounting records.

    Regarding your vehicles, if they are privately owned, you wouldn't record them as assets of the business. You can record and claim expenses incurred in the production of income, however, such as petrol. I'm not quite sure about the HP and interest. You might be able to apportion it, but I'm really not 100% sure.

    Regarding depreciation: You would be able to record depreciation on any depreciable assets which belong to the business. Thus, if your vehicles remain privately owned, you wouldn't be able to claim depreciation on them. On any office equipment etc belonging to the business, you would be able to set a depreciation policy and claim that percentage each year as an expense. I would recommend, for simplicity's sake, that you take a look at SARS' Wear & Tear policies for various assets and match your depreciation policy to that. This will mean that your depreciation expense and your wear & tear allowance should be the same each year.

    As far as travel allowances is concerned: Travel allowance is a deduction in respect of tax. In order to claim a travel allowance you first of all need to be an employee who is given a travel allowance by the business. Secondly, you need to keep accurate records in a logbook as well as any expenses which you incurred (petrol slips). Then, unless it's changed in the last year (I'm not sure), you can deduct the business portion of that travel allowance using SARS' formula.
    I think from a business point of view you can expense the portion of running costs of the vehicle which pertains to the business. (You could probably split this using the logbook)

    If I'm wrong with anything please somebody correct me. I've kind of hit a blank on my general bookkeeping knowledge, it's shocking! This is what 3rd year accounts does to you!

    Hope that at least helps you in some aspects, Ice.

  2. Thanks given for this post:

    Dave A (23-May-11)

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