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You're entitled to claim 28% of your bad debt!
Discover how Greg got R22 400 from SARS for his company's bad debt so you can do the same...
Plus discover 46 other ways to get your money back from SARS through allowances and deductions.
Read on to find out more!
What is a scrapping allowance?
It's an allowance you can claim when you sell a business asset, someone steals it, you lose it or it's destroyed, say in a fire.
But you can only claim this allowance on any business asset that has a 'useful life' of less than 10 years and if what you get for it is less than the net tax
value. The net tax
value is what you paid for it less any wear and tear allowance you've claimed on the asset.
But be careful, don't try claim a scrapping allowance if you're closing your business and selling everything off. Or have gone into liquidation and need to sell all your assets! SARS won't allow it!
Now let's have a look at how you can qualify for this allowance.
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6 Reasons to sign up to the 30-day review of the Practical Tax Loose Leaf
Here's just a small sampling of the essential, tax
saving, information you'll find when you get your 30-day review of the Practical Tax Loose Leaf:
• How buying a car on a maintenance plan can shrink fringe benefit tax to just 3.25%
• A clever (but completely legal) method to use depreciation to shrink an employee's tax bill
• How to calculate your CGT liability in just 5 easy steps
• What CGT can do to a small business – the effects can be devastating
• What every provisional tax payer MUST KNOW about CGT
• 3 Travel Allowance errors you MUST avoid to escape costly penalties and audits – and how to get yourself out of trouble if you've already made any one of them.
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3 Criteria you must meet to qualify for the allowance
You must be disposing of the asset. This means it's being sold, has been written off, destroyed or is worn out, like your printer.
'Worn out' doesn't necessarily mean that the asset is completely useless. As long as you've decided it's so old you can't use it in your business anymore, it will qualify.
The asset must have qualified for a capital allowance. The capital allowances are:
· Wear and tear
deductions for the depreciation of the asset;
· Deductions on the wear and tear of manufacturing assets (e.g. production machinery) and assets used in hotels (e.g. industrial washing machines); or
· Deductions for assets of a small business corporation, for example your printer.
You MUST have claimed one of these capital allowances on the asset
If so, then you can claim the scrapping allowance.
For the formula and practical example on how to calculate your scrapping allowance, get your copy of the Practical Tax Loose Leaf now.
How many of the tax
allowances and deductions available to your business do you actually use? Well, here are 31 tax
deductions you can use. Find them here.