The Practical Vat Loose Leaf Service explains that if you paid Vat on any goods you bought BEFORE you became a Vat vendor (and you still own them); you can only claim the input tax when you become a registered vendor.
You just need to use the date of your vendor registration as the date of the input tax claim.
Sparks Electrician starts business on 1 July 2011. He buys a Light Duty Vehicle (LDV) for R114 000, tools for R57 000 and stock for R22 000. Because he does work mainly for other businesses, on 21 January 2012 he registers for Vat with effect from 1 January 2012.
Until that date, he made ordinary sales, but as from 1 January 2012, he makes taxable sales and must charge Vat.
He does a stock take on 1 January and can claim the following 'change of use' input tax:
Lower of cost or open market value:
LDV - R90 000
Tools - R50 000
Stock - R100 000
R240 000 X 14/114 = R29 474
After all, when it comes to input tax claims you must have satisfactory proof of purchase.
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