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Did you know: That leaky pipe in your office could get you some tax back?

by , 09 June 2014
You're sitting in your office and all you can hear is that 'drip, drip, drip'. That leaky pipe has been driving you insane for weeks now. The problem is, you don't have the money to repair it.

But there's good news! You can call the repairman and, along with all his tools, he'll also bring a tax deduction with him.

Use this secret to get that pipe repaired, keep your sanity and get tax back from SARS...

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Legally pay less tax

Here's when you can claim a tax deduction on 'Tim the Tool man'

You use your building premises to generate income. This means it's a capital asset and you can't claim any tax allowances on it.
BUT when you pay to have repairs done to the property, you're paying to run an asset that you use to generate income. That, you can claim as a tax deduction.
The Practical Tax Loose Leaf says these repairs can be anything from treating to wood to stop it rotting to repairing machinery and utensils.
If you do repairs to a property you get residential rental income from, you can also claim those as a tax write-off.
But if you pay for improvements or additions to the property, you can't claim those. So you need to know what counts as repairs and what counts as improvements. To ensure you claim for repairs use this checklist…

Four checks you must use to ensure you claim repairs and not improvements 

Check one: Have you replaced or renewed a part of your business property?
Check two: Have you done repairs other than improvements?
Check three: Has the part you replaced or renewed caused your income to increase? (If yes, then it's an improvement).
Check four: Did the repairs simply restore your asset so it could continue to earn the same amount of income?  (If no, then it's a repair).
There you have it: Proof that you can resolve your leaky pipe problem and still save money on your taxable income.
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Avoid 200% tax penalty

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