Three steps to follow when processing business travel expenses
Experts behind the Practical Vat Loose Leaf Service
recommend you follow this simple, logical procedure to ensure you never overlook valid deductions, or make mistakes when you process business travel expenses
Step #1: Make sure your employee meets the criteria
In this article
, we explain that the condition for claiming input tax
on business travel is: You (director), your business partner or your employee must have spent at least one night away from your usual residence and place of work for business purposes.
Only if the business travel meets this requirement can you recoup any of your business travel costs through the input tax
We're not done. Here are two more steps you must follow…
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Step #2: Collect all invoices and ensure they're100% correct
The most important link in the Vat
chain is the tax
invoice and if it's incorrect or incomplete in any way your input claim will collapse. So insist on valid invoices from all your suppliers before payment.
You can claim input tax
invoices in the name of your business (with your Vat
number if over R5 000) or in the name of a director, partner or employee because they're acting as your agent in acquiring goods and services for your business.
Step #3: Work through the invoices and claims
Once you've checked that:
Your employee was away from the place of residence and business for at least one night, and
He did submit invoices for all travel expenses, and
These invoices are valid and will support any input tax deduction.
Then you can consider the various claims and determine what you can and can't claim.
It's that simple.
Following these three steps will help ensure you process business travel expenses seamlessly.
PS. Here are 34 Input tax
savings you could be missing out on…