Secondhand goods are goods that have been previously owned and used. As you know, no Vat is charged on the sale or purchase of secondhand goods.
But if you sell secondhand goods, you'll need to record some important details relating to the transaction, in just the same way as you would need to issue a fully valid tax invoice for the sale of a taxable supply, says the Practical Vat Loose Leaf Service.
These kinds of sales are differentiated into two types. And each one has slightly different requirements:
Let's take a closer look at how to deal with each kind of supply.
This is how you must manage supplies for less than R1 000
When dealing with supplies for less than R1 000, you'll need to keep a written record that reflects the following important items of information relating to the sale:
The name, address and ID number of the supplier or seller (if it's a company, then get the details of a representative person). Remember to verify the ID number by checking it against the original document – don't just accept the seller's word for it.
Here's a useful tip: The Practical Vat Loose Leaf Service recommends you use to record all this information and ensure you don't forget to record anything:
But what about supplies for R1 000 or more?
Use this method to deal with for more than R1 000
If you sell the secondhand goods for R1 000 or more, then, in addition to the details listed above, you'll have to record two more particulars for your records:
It's that simple. With this method, you'll never get the treatment of secondhand goods wrong.