HomeHome SearchSearch MenuMenu Our productsOur products

Knowing this one thing about your company's expenditure could make all the difference to your bottom line

by , 30 May 2014
Running a business is expensive. All the different assets and expenses really start to take a toll on your bottom line.

Thankfully, you can claim some expenses and losses as tax deductions. This will offer you a bit of financial relief at the end of every tax year.

The problem is, you can't claim all your expenses as a business tax deduction. If you claim the wrong one, you'll need to budget for a SARS penalty as well. Read on to avoid this happening to you.

*******
Avoid costly tax issues
 
Don't pay another cent on expensive tax consultant or lawyer fees
*******

You can't claim a tax deduction on expenses that are capital in nature

Generally speaking, according to the Practical Tax Loose Leaf ,an asset is capital in nature if you bought it to help bring in an income. This type of asset will also have long-lasting benefits for your company.
 
An example of such an asset would be the equipment you use to make your products or your billboard advertising. 
 
To see if a certain asset is capital in nature, ask yourself:
 
1. Do I need this asset to run my business? 
2. Does this asset bring in long-term benefits for the company?
 
If you answer 'yes', then it's capital in nature and you can't claim it as a tax deductable expense. 
 
So then what assets aren't capital in nature?
 
*******
How much time do you spend looking for useful tax information? Do you need all the South African taxes analysed and explained in one easy location? 
 
Now you can have all the information in one place: The Practical Tax Loose Leaf Service.
Over 500 pages compiled by our tax experts, comprising of: 
 
All the definitions and legal regulations, useful advice, exceptions to the rules that help you slip through the legislative jungle of taxes. 
Case studies and practical examples that show you what elements you should consider for your taxes to be perfect.
Red flags you need to watch out for and the penalties you'll face if you don't respect them.
Sample templates at your disposal, ready to be filled in, customised and printed. 
 
You will also get free access to the accountingandtaxclub.co.za. Here you'll find questions and answers on any tax and accounting issues. You can also ask our experts a tax question 
 
*******

You can claim a tax deduction on expenses that aren't capital in nature

An asset isn't capital in nature if it helps you run or manage the assets that bring in income. You can claim these kinds of assets as tax deductions. For example, the oil for your equipment or the initial cost of putting up that billboard.
 
To see if the asset isn't capital in nature, ask yourself:
 
1. Do I need this asset to run the assets that bring in income? 
2. Does this asset only have short-term benefits?
 
If the answers were 'yes', you can claim the expense of getting that asset as a tax write off.
 
With that information, you can claim your deductable expenses with confidence and get a little financial relief from SARS.
 


Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>