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
Determine the market value of the business stock you're appropriating for your own personal use.
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.
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
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