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Vat Input - Are You Claiming All You Should Be?

Vat Input - Are You Claiming All You Should Be?

Author: Natalie Wocke
Date: 2014-06-20
Installment Credit Agreements: Special Rules:

Special rules apply to installment credit agreements, in relation to the timing of the input claim.

These rules direct that the full input on the cash sales value may be claimed at the earlier of delivery of the goods, or the time any payment is made, as long as any time for "cooling off" - (where the purchaser has a right to return the goods), has expired.

E.g.: A vendor purchases a new truck for R1 ,140,000, payable in monthly installments over 4 years. An old truck is traded in as a deposit. (The vendor must declare the capital output on the consideration received for the trade-in). The vendor may immediately claim the R140, 000 vat input on the cash sales value of R1, 000, 000 - subject to them being in possession of the relevant supporting documentation.

The full input will be refunded "up-front", resulting in a useful cash injection into the vendor's business.

A common error encountered in practice is where the vendor claims input on the installments themselves. This results in input being over claimed, as the installment contains an element of interest, which is exempt from VAT.

The good news is, you have 5 years in which to claim input vat..... In the event that you have not claimed all you should have, you may still claim what is due to you, (subject to documentary requirements), within 5 years.

Have you claimed all you should? For a consultation on your vat matters, contact Roberts and Chaplin on 032 586 0387 (Ballito) or 947 1010 (Umhlali).