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Thread: Vat on vehicles

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    Vat on vehicles

    Hi there,
    I have a question that I need some advice on.
    If a company (CC) purchases a caravan for the private use of it's owner. Can the company process the VAT thorugh its books on this caravan?

    Thanks
    Wendy

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    How is the caravan going to be applied in the generation of output VAT?

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    Quote Originally Posted by wendymend1 View Post
    Hi there,
    I have a question that I need some advice on.
    If a company (CC) purchases a caravan for the private use of it's owner. Can the company process the VAT thorugh its books on this caravan?

    Thanks
    Wendy
    Although you pay Vat on the purchase, you CANNOT claim the Vat. No Vat is allowed on vehicles for private use. In fact you cannot even claim vat on passenger vehicles for BUSINESS USE. Only Trucks and Bakkies. Four door bakkies are also NOT Vat deductible(passenger vehicle). You mentioned private use, so SARS would not even look at your case.

    Maybe, just maybe.. if the caravan can be used solely for business use(office for instance), you can claim it, on your books, as a business asset/expense.
    Sean Goss We all are scared, but only few are brave.
    www.sgafc.co.za

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    Platinum Member Marq's Avatar
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    A caravan looks like a portable office to me. How about a site office for your new operation in the berg. The new one where you are developing plans for schemes on tax avoidance. Not evasion, mind you just avoidance and at the same time you have to develop a plan for a plan to make a plan for your business in the berg. Just like they do in the goberment.
    The cost of living hasn't affected its popularity.
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    Thanks guys for all the advice on my question.

    As the carvan isn't going to be used for business purposes.
    Would it be correct to say that I can't show any VAT (input or output) in the books?
    The caravan would be added as an asset but with no VAT?

    Thanks again.
    Last edited by wendymend1; 14-Oct-09 at 08:03 PM.

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    You will disclose it inclusive of Vat. If the caravan was R50 000 plus R7000 vat for instance. The cost you bring the asset in, would be R57 000.00.

    Good Luck
    Sean Goss We all are scared, but only few are brave.
    www.sgafc.co.za

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    and how does it work for car rentals? I want to buy 10 new cars for my car rental business - can I claim the VAT? Thanx!

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    Quote Originally Posted by sunny View Post
    and how does it work for car rentals? I want to buy 10 new cars for my car rental business - can I claim the VAT? Thanx!
    Hi, yes you can claim the vat on the vehicles and it will still be classified as an asset in the financials.
    Last edited by Dave A; 10-Jan-10 at 09:37 AM.

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    As the caravan is for private use, it should not appear in your books at all, and if paid for through company assets ie. business funds, must appear as "drawings" for owners or directors, and site/paye tax paid in your personal capacity as if the figure is an earnings.

    You would have to have clear evidence that the caravan was essential to conducting your business before it could be included as a company asset.
    Might be different for a CC?

    Either way, it is better for you in your personal capacity to be the "owner" of the asset.

    Yes, without question, don't pay tax on anything that is legally deductible, but there is a fine line between possible tax avoidance and tax evasion!

    Just a small bit of advice to anyone considering owning their own business:

    If anyone has the idea that one of the advantages is the ability to avoid any taxes, in almost every case, it will be evasion of taxation, rather than avoidance, right now there are very few instances of benefits to owning your own business from a taxation point of view! Yes! I know - high finances perhaps, but for the "ordinary" man in the street small business, it is very difficult to find benefits which are worth the chance of having the SARS disagree with your deduction!
    Just study the taxation on "use of a company vehicle" etc.

    Yvonne

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    vat on vehicles

    Hi there,

    Understanding the vat claiming on vehicles, vat claims are not allowed on motor vehicles when purchased by a vat vendor.

    However, when vehicles is a main source of income, i.e. the armed response industry. Sure we do not claim the vat on the purchase of the vehicle, however are you allowed to claim the vat on the running costs of the motor vehicle: maintenance, insurance, repairs, etc.

    Best regards
    A

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