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Here's the single best tax allowance that'll always save you money!

by , 01 August 2014
It doesn't matter what kind of company you have, you always have assets. Those assets, over time, always depreciate.

Now this might make you think your company's net wealth is always going to decrease unless you keep buying new assets.

But before you rush out to refurbish your office, let me tell you about the tax allowance that prevents this net wealth decrease. It's the one that'll always save you money on your tax...

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Asset depreciation is the best money saving tax allowance

As I said, all your assets depreciate, but this is a good thing when it comes to your taxes. 
The reason?
The wear and tear allowance! 
This handy allowance lets you claim your asset's depreciation percentage each year. 
All you need to know is the value of the asset and its lifespan. 
For example, a computer that costs R15 000 and has a lifespan of five years, depreciates at a rate of 33.33% each year.
This means you can claim R3 000 in wear and tear on that computer each year.
But if that computer costs less than R7 000, you can claim that money back even faster.

Here's how depreciations on assets worth less than R7 000 works

You can claim the full value of any asset that cost less than R7 000 in the same year. 
So if you got a great deal on that computer and only paid R6 500 for it, you can claim that full amount as a tax deduction in the same year.
So you see, it doesn't matter what assets you have or how much they cost, they all depreciate. This means you can get cash back on all of them.
Depreciation and wear and tear really is the best tax allowance when it comes to saving you money every year. 
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