Tags: vat, vat on business stock you take home, vat on own-supply of goods or stock, how to declare vat on the goods you take home for your private use, private use of business assets, own-supply of goods, vat on private use of business assets

Many business owners make the mistake of treating their business stock as their own personal disposable property. But if you take or use goods from your Vat-registered business for your own use, or 'self supply', then you'd better take note of the Vat rules, or face the penalties!

The Vat experts at the Practical Vat Loose Leaf explain that one of the obvious examples of own use is where the owner of a business such as a supermarket takes some of his stock for his private use.
They say there are three steps the business owner can follow to stay legal. Take a look:
Step by step: Three straightforward steps to stay legal when it comes to Vat and business stock
Step #1: Determine the market value of the business stock you're appropriating for your own personal use.
Step #2: Apply the tax fraction (14/114) to this market value. This will give you the amount of output tax that is due to SARS on you taking this stock out of your business for your personal use.
Step #3: Enter the specifics of the calculation you've made, and the resulting amount of output tax you've identified has to be paid to SARS, in blocks 10 and 11 of your Vat return.
 
Here's a quick tip that'll save you money...
If you're buying goods for private use and for your business, have your suppliers make out two invoices and don't claim input tax for the private purchases. This way, you won't have to declare output tax on your purchases. This benefits you as you'll only lose Vat on the cost price rather than your selling price!
Make sure you don't take any stock or business assets home, without following these Vat rules!

Author: FSP Business