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Want to deduct the cost of repairs from your tax bill? Make sure you meet SARS' three requirements first

by , 04 June 2014
Have you done any repairs recently?

If so, the good news is, SARS will allow you to deduct the cost of your repairs.

But as you know, with SARS there's always a catch. In this instance, the taxman will only allow you to deduct the cost of your repairs if you meet three requirements.

Read on to find out what they are so you can improve your company's cash flow.

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Good news: SARS will allow you to deduct the cost of repairs if you meet its three requirements

The Practical Tax Loose Leaf Service says, you can deduct the cost of repairs if you incur them during the year of assessment. In addition, the repairs must meet these three requirements.

You must ensure the repairs relate to:

#1: Property you occupy for the purpose of trade or for which you receive income.

#2: Any expenditure you incur on treatment against attacks by insects to any timber that forms part of the property.

#3: The repair of machinery, implements, utensils and other articles you use for the purposes of your trade.

Remember, the cost of improvements or additions to property aren't deductible because the expenditure is capital in nature (but you could be able to claim an allowance on these costs).

We have one useful tip you can use when it comes to repairs.
 

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Legally pay less tax

139 reasons SARS doesn't want you to see this.
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You can deduct the cost of the repairs you incur even if you aren't the owner of the premises or the machinery, implements, utensils or articles

That's right.

Let's say, Jason rents a premise for the purposes of his trade. One of his workers breaks a window and Jason foots the bill for a new windowpane.

Jason can deduct the cost of any repairs he incurs, despite the fact that he isn't the owner of the assets used in his trade.

There you have it. You can only deduct the cost of repairs if you meet SARS' three requirements. Make sure you comply so you don't get into trouble for claiming unfairly.



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