As a Vat vendor, it's your duty to charge output tax and claim input tax as long as you can prove your claims with the required documentation.
But 'all it takes is just one mistake for SARS to deny your input tax claim and slap you with penalties and interest!' warns Dee Bezuidenhout in The Practical Vat Loose Leaf Service
This can add thousands to your company's SARS' bill.
Luckily, by ensuring your input tax claim contains these two things, SARS will have no choice but to accept it.
Here are the two things you must do to guarantee your input tax claim
#1: Keep all your tax invoices. You need a valid tax invoice to prove your input tax claim to SARS. If you don't have the tax invoice or if the invoice isn't valid, you can't claim the credit.
#2: Only claim for items you're allowed to claim on. The second element to your input tax strategy is to know what you can claim for and what you can't.
Here are some examples of business costs you can claim input tax on:
'One of the most common mistakes vendors make when calculating their input tax claim is to include amounts that aren't allowed,' says Bezuidenhout. If you do that, you stand the chance of SARS rejecting your input tax claim right off the bat.
Bottom line: Input tax claims are a great way to cut your SARS bill by a few thousand rand. Make sure you claim correctly to avoid having them rejected and landing on SARS' bad side.
To learn more about input tax and what you can and can't claim, get the Practical Vat Loose Leaf. In the Practical Vat Loose Leaf we've got a dedicated chapter on input tax. In it you'll discover: