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Are those patents, logos and copyrights costing you a fortune? They don't have to

by , 14 July 2014
Every asset your company owns is an investment. They're there to make you money.

Your intangible assets are essential to the very existence of your company. But these intangibles - items like patents, logos and copyrights - the cost quickly add up.

But they don't have to drain your business cash flow...

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Intangible assets depreciate just like tangible ones do

 
We've spoken a lot about depreciation and how it can save you money. This because all your company assets - from the company car to the couch in reception - depreciate over time. 
 
What we haven't told you much about though is that your intangible assets also depreciate. 
 
This means you can claim a wear and tear allowance on them too. This is a great way to make those expensive company costs work for you on your tax return. 

Here's what you need to know to work out the asset depreciations of your intangibles...
 

Save money by calculating depreciation on your intangible assets

 
Your patents, logos and copyrights depreciate at 5% of their original value each year. If you use the straight line method to calculate depreciation on a patent that costs R10 000, you can claim 5% or R500 back on it each year. 
 
If you paid for designs or development programmes, those depreciate at 10% of their value each year.
 
AND if the intangible asset costs R5 000 or less, you can write off the whole amount in the same year.
 
The bottom line: Your intangible assets no longer have to drain your company of money. Just remember to calculate their depreciation correctly and you can get a ton of money back from SARS.
 
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