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Knowing how SARS grants a wear and tear allowance will go a long way in ensuring you benefit from this deduction.
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It contains everything you need to know about allowances and deductions.
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Here are a few basic principles of wear and tear
You can claim a wear and tear allowance on any machinery, plant, utilities you own as long as you use them in your trade and they've worn down by wear and tear or depreciation in the year of assessment.
Four factors that influence wear and tear allowance on fixed assets
SARS will grant you an allowance for your fixed capital investments (Assets) depending on the following:
1.Size of your business
Some allowances only small business corporations can claim
2.The industry you operate in
Farmers, manufacturing enterprises and building industries have their own specific allowance
3.Type of assets you own
Certain allowance applies to certain assets. So for a manufacturing company, certain allowances apply to the production plant, while different allowances apply to computer equipment, office furniture and delivery vehicles.
4.Initiatives that government encourages
Certain inner city areas has specific allowances to encourage the private sector to invest in the infrastructure located in these designated areas.
Read on for the certain business assets and their write off –periods.
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SARS has created a list of acceptable wear and tear write-off periods for a whole range of different assets.
SARS allows a write-off period of five years for items like:
Personal computers; and
This means, you can claim a 20% allowance on the value of these items a year for five years.
SARS allows a write-off period of three years for items like:
Electronic office equipment;
Television and advertising films.
For a full list on SARS' wear and tear write-off periods for other equipment, refer to Chapter W02 in the Tax Loose Leaf
. Make sure you check it out so you don't miss any tax
deductions could claim on.
For more information on tax
deductions sign-up to the Practical Tax Loose Leaf Service here...