You have a right to claim an input tax adjustment for your business, provided you can substantiate your claims and back them up with all the necessary documentation.
An adjustment is a calculation that results in an additional amount of output tax that's to be paid or input tax that may be claimed, says the Practical Vat Loose Leaf Service.
But before you claim an input tax adjustment, you first need to know the circumstances where you'll be allowed to claim.
Four circumstances where you may claim an input tax adjustment
#1: You acquired goods or services for a non-taxable (non-business), partially taxable or exempt use, but are now using them for a taxable use.
#2: Vat was paid and no input tax deduction was made, for example, because your business wasn't registered for Vat yet.
#3: You own capital goods (assets), which cost more than R40 000 and are used only partially for taxable supplies. These have an annual increase of more than 10% of taxable use.
#4: You purchased second hand goods and didn't clam an input tax deduction.
The Practical Vat Loose Leaf Service advises you maximise your claims and increase your refunds as much as you can. Just remember that when you do input tax adjustments, you're entitled to do adjustments for up to five years. And you must be in possession of valid tax invoices to do so.