YOU BOUGHT A THING.WHAT HAPPENS?

The installed security equipment is written off over time under wear and tear, but burglar bars and security gates fixed to a building you own may be treated as part of the building instead.

The answer turns on the facts · Sole proprietor or freelancer

Cameras, alarm panels, beams and electric fence energisers are movable equipment and normally attract s11(e) wear and tear over the accepted period. Burglar bars, security gates and walls fixed into the structure are more likely to be capital improvements to the property, which for an owner sit in base cost rather than in a deduction. A VAT vendor claims the input tax on the installation invoice for business premises in the normal way.

The monthly armed response, monitoring or guarding fee for your business premises is a straightforward deductible running cost.

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It is recurring, it is incurred to protect the business and its income earning assets, and it is not capital. Deduct it as incurred and claim the input tax if you are a VAT vendor. Where the same contract covers your home and your business premises, apportion it on a defensible basis and keep the working.

Art on the office wall is generally not written off at all, because works of art tend to appreciate rather than wear out, so the cost usually just sits as base cost until you sell.

No deduction now, it reduces tax when you sell · Company

Wear and tear under s11(e) is an allowance for assets that depreciate through use. Works of art are the standard example of an asset SARS does not accept as depreciating, so no annual allowance is claimed. Cheap decorative prints and framing are a different matter and may be treated as ordinary low value office fittings. When genuine artwork is sold, the gain is dealt with under capital gains, with the purchase price and costs of acquisition forming part of base cost. Personal use asset exclusions do not help a company, and for an individual an artwork used in a trade is not a personal use asset.

Feeding a client at your office is deductible for income tax if it is genuinely business related, but the VAT input tax on it is denied outright.

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Income tax has no general entertainment ban for a business: if the cost was incurred in producing income, s11(a) allows it. VAT does have a ban, and it is close to absolute. The practical result is that client entertainment sits in your income tax deduction schedule and must be excluded from your input tax claim. Keep a note of who was entertained and why, because the business purpose is the only thing standing between a deduction and a private consumption disallowance.

Small, cheap items bought for the office can usually be written off in full in the year you buy them, while anything above the small item threshold has to be written off bit by bit over its useful life.

The answer turns on the facts · Sole proprietor or freelancer

The wear and tear allowance in s11(e) is the general rule for business equipment: you claim a slice each year, not the whole price. There is a long standing exception for small items: assets costing less than a set rand amount per item may be written off in full in the year of acquisition. The threshold is a specific rand figure per item, not per invoice, and it is set by SARS practice rather than something you choose. This is why a plug adaptor and a fridge get different answers even though both plug into the same wall.

Everything you buy to keep the business premises clean is an ordinary running cost and is deductible in full in the year you spend it.

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Detergents, bags, mops, brooms and cloths are consumed in the business. Even the durable items like a mop or a vacuum head are far below the small item write off threshold. A commercial floor polisher or industrial vacuum cleaner is equipment and may need to be written off over time. VAT input tax on cleaning materials is claimable in the ordinary way, since these are not entertainment.

Co-working membership, hot desk fees and meeting room hire used for the business are fully deductible running costs.

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It is a service fee for the use of premises and facilities in the trade, deducted as incurred, and input tax is claimable by a VAT vendor on a valid tax invoice. A virtual office or registered address service is deductible on the same basis. For someone who otherwise works from home, paying for a co-working desk is often cleaner than fighting the home office restrictions, because there is no apportionment argument and no exclusivity test.

The machine is equipment, the pods are consumables, and the two are treated differently: the machine may have to be written off over time if it is expensive, while the coffee itself is a running cost.

The answer turns on the facts · Sole proprietor or freelancer

A cheap pod machine falls under the small item write off and comes off in full. A commercial bean to cup machine will usually exceed the small item threshold and is written off under s11(e) over its useful life. The pods, beans, milk and sugar are consumed as you go and are deducted as spent. The VAT position is where it gets uncomfortable: refreshments supplied to staff or clients fall inside the VAT definition of entertainment, so input tax on the coffee itself is normally denied even though the income tax deduction stands.

Tea, coffee, milk and sugar for the office are deductible for income tax, but the VAT input tax on them is normally denied because VAT treats refreshments as entertainment.

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For income tax the test is only whether the expense was incurred in producing income and is not of a capital nature, and the running costs of a staffed workplace pass that test. The VAT Act works differently: 'entertainment' is defined to include the provision of food and beverages, and input tax on entertainment is specifically denied, with narrow exceptions such as vendors whose actual business is supplying entertainment. So the same grocery slip is deductible in the income tax return and blocked in the VAT return.

Reception seating is business furniture and is written off over time under wear and tear, not deducted in one go.

Written off over time, not all at once · Sole proprietor or freelancer

It is used in the business because clients wait on it, so the trade connection is fine. It is the price that puts it into the wear and tear regime rather than the small item write off. Where the same couch also serves a residence, only the business portion works, and in a home office the exclusivity requirement usually kills it entirely.

Mugs, plates and cutlery for the office are cheap consumable-type items and come off in full in the year you buy them.

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Each item is far below the small item write off threshold, and in practice these are replaced constantly as they break or walk. Branded mugs handed out to clients shift category: they may be marketing or, if given away, may raise a small entertainment or advertising characterisation question for VAT.

A refundable rental deposit is not an expense at all, it is money you still own sitting with the landlord, so there is no deduction when you pay it.

There is no relief for this · Sole proprietor or freelancer

Nothing has been incurred; you have simply moved cash into an asset. It becomes a deduction only when and to the extent it is actually applied against rent or forfeited for damages, and any interest the deposit earns is your income. In the books it belongs on the balance sheet as a receivable, not in the expense accounts.

An office dishwasher is normally written off over several years under wear and tear rather than deducted in full.

Written off over time, not all at once · Sole proprietor or freelancer

Price is what decides, measured against the small item write off threshold per item. Most dishwashers exceed it and so attract the s11(e) allowance over the accepted write off period. Installation and plumbing to fit it into the kitchen is a separate question: if the plumbing work is a permanent alteration to a rented building it may be a leasehold improvement rather than a running cost.

Replacing a lock, calling a locksmith or cutting keys is a deductible repair, while installing an access control system is equipment written off over time.

The answer turns on the facts · Sole proprietor or freelancer

Restoring what was there, a broken lock replaced with a similar lock, is a repair under s11(d) and deducted. Cutting spare keys and emergency locksmith call outs are running costs. Installing a biometric reader, card access system or an electric gate motor where none existed creates a new asset, so it falls into s11(e) wear and tear or, if the amount per item is small enough, the small item write off.

Yes, a plug, adaptor or extension cord bought for the workplace is a normal business running cost you can claim in full in the year you buy it.

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It is used in the business, it costs very little, and it falls comfortably under the small item write off, so there is no need to depreciate it. Surge protectors and multiplugs bought because of load shedding are the same answer. If you are a registered VAT vendor you also claim the input tax on the till slip, provided it is a valid tax invoice.

Annual servicing, refills and the fire compliance inspection are deductible running costs, while a substantial installed fire system is equipment written off over time.

The answer turns on the facts · Sole proprietor or freelancer

Servicing, pressure testing, refills and the municipal or private fire compliance inspection are recurring and deducted as incurred. A portable extinguisher is usually cheap enough for the small item write off. A hose reel installation, sprinkler system or detection system installed into the building is a different scale and can be either wear and tear equipment or, if it becomes part of the structure, part of the building's cost with its own capital treatment.

A workplace first aid kit and its refills are cheap, legally expected, and fully deductible in the year you buy them.

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Occupational health and safety law expects an employer to have first aid provision on site, so this is squarely a cost of running the business. The kit and refills are far below the small item write off threshold. First aid training for a designated staff member is likewise a deductible staff cost, and formal training may interact with skills development levy reporting.

An office fridge is usually expensive enough that you write it off over several years under wear and tear rather than claiming the whole price in year one.

Written off over time, not all at once · Sole proprietor or freelancer

SARS publishes an accepted write off period per asset type, and you claim a slice of the cost each year while the fridge is used in the business. A very cheap bar fridge may fall under the small item threshold and come off in full, so check the price against the current figure. If the business is a VAT vendor, input tax on a capital asset like this is claimable in the tax period of acquisition, subject to the normal apportionment where the business makes both taxable and exempt supplies.

A regular garden or grounds service at your business premises is a normal maintenance cost and is deductible.

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Recurring maintenance keeps the property in the state it is in, which is revenue in nature and deductible. That is true whether you own or rent the premises, as long as you carry the cost and the premises are used for the trade. If the garden service also does your house, only the business portion is claimable and you should be able to show how you split it.

A generator or inverter for the business is normally written off over time under wear and tear, and the diesel or petrol you put in it is a running cost you deduct as you spend it.

Written off over time, not all at once · Sole proprietor or freelancer

Straight backup power equipment is ordinary business plant and attracts the s11(e) allowance over the accepted write off period, with the fuel and servicing deducted as incurred. That is different from a solar or other renewable installation for a business, which has its own accelerated capital allowance regime and can be considerably more generous. If you are choosing between backup options, the renewable route is the one where the tax treatment actually changes the maths.

A kettle bought for the office kitchen is a business asset, and because it is cheap it can normally be written off in full in the year you buy it.

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The kettle is used in producing income in the same loose sense that a bin or a light bulb is: it services the workplace. Its cost is well below the small item write off threshold, so the wear and tear machinery never really has to be engaged. A large commercial urn or a plumbed boiling water tap is a different animal, and may be dearer than the threshold or may be a fixture in the building.

Maintaining the grounds is deductible, but landscaping that creates something new or better is capital and is not deducted as an expense.

The answer turns on the facts · Sole proprietor or freelancer

The line is the repair versus improvement line. Replacing a dead hedge with a similar hedge restores what was there and is revenue. Paving a bare patch, building a retaining wall, installing an irrigation system or redesigning the frontage creates a new advantage of a lasting nature, and is capital. If you own the property, capital landscaping generally goes into the base cost for capital gains purposes rather than being deducted. If you rent, work you do to the landlord's property may be a leasehold improvement with its own rules, and may also be taxable in the landlord's hands.

A once off premium paid to secure a lease is not ordinary rent, it is spread over the lease period under a specific allowance rather than deducted all at once.

The answer turns on the facts · Sole proprietor or freelancer

The Income Tax Act deals separately with a premium or consideration paid for the right of use of property, allowing the payer a deduction spread over the period of use subject to a cap on the number of years. It is taxable in the landlord's hands as well. Because both the spread and the cap turn on the lease terms, get the actual lease in front of whoever prepares the return.

A cheap microwave for the staff kitchen is normally written off in full; a pricier or commercial one has to be written off over its useful life under wear and tear.

The answer turns on the facts · Sole proprietor or freelancer

The dividing line is the small item write off threshold applied per item. Below it, deduct in full in the year of purchase. Above it, claim the s11(e) allowance spread over the write off period SARS accepts for that class of asset. Either way the business use test is the same: it must serve the workplace, not your kitchen at home.

Electricity, water, refuse and municipal rates for premises used in the business are deductible running costs.

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Whether you pay the municipality directly or reimburse a landlord for a recovery, the cost of powering and servicing business premises is deducted as incurred. Prepaid electricity is deductible too, but you need the purchase records, not just a meter reading. Municipal rates on premises you own and use for the trade are deductible; rates on a property held privately are not. Municipal charges are largely outside the VAT net for some line items and inside for others, so a VAT vendor should read the bill rather than claiming a flat percentage.

Office furniture is written off over several years under wear and tear, unless an individual item is cheap enough to fall under the small item write off.

Written off over time, not all at once · Sole proprietor or freelancer

SARS publishes an accepted write off period for furniture and fittings, and you claim a portion of the cost each year the asset is used for trade. Test the price per item, not per invoice: a set of six chairs may all fall under the small item threshold individually. A VAT vendor claims the input tax on the purchase in the tax period of acquisition. When you eventually sell or scrap the furniture, recoupment rules can bring past allowances back into income.

Plants bought or hired to make the business premises presentable are a deductible running cost, and a monthly plant hire contract is deducted as it is incurred.

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The reasoning is the same as for paint or a doormat: it maintains a workplace that clients see. Individual plants and pots are cheap enough to fall under the small item write off. Plant hire and maintenance contracts are simply monthly service costs. Where you buy a large, expensive specimen tree or an elaborate installation, the amount can push it past the small item threshold and into a durable asset question.

The cost of physically moving an existing business is usually deductible, but money spent setting up or fitting out the new premises is often capital and is not.

The answer turns on the facts · Sole proprietor or freelancer

Removal fees, transport, disconnecting and reconnecting services, and updating stationery and signage details read as revenue costs of continuing an existing trade. Fitting out the new space, new partitioning, new cabling, new built in furniture, is capital expenditure on assets or on the premises, and is dealt with under wear and tear, the leasehold improvement rules, or base cost. Costs of establishing a business before it starts trading fall into their own pre trade regime rather than being ordinary deductions.

If you rent the equipment you deduct the monthly payment; if you are buying it off over time you do not deduct the instalment, you claim wear and tear on the asset plus the finance charges.

The answer turns on the facts · Sole proprietor or freelancer

Under a true operating lease or rental you never own the asset, so the rental is a straightforward s11(a) deduction. Under an instalment sale or suspensive sale agreement you are the owner from the start, so you capitalise the cash price, claim the s11(e) allowance over the asset's write off period, and separately deduct the interest or finance charges in the instalment. The VAT treatment diverges too: on an instalment credit agreement a vendor generally claims the full input tax up front, whereas on a rental the VAT comes through with each monthly invoice.

It depends on what each one cost. Cheap ones are written off in full in the year you buy them; anything over the small item threshold is written off over its useful life.

The answer turns on the facts · Sole proprietor or freelancer

The general rule in s11(e) is a slice each year, not the whole price, with a long standing exception for small items: an asset costing less than the set rand amount PER ITEM may be written off in full in the year of acquisition. Applied per item, that usually splits this group. A whiteboard, a laminator and a domestic binding machine are almost always under the threshold and are written off in full. A commercial paper guillotine routinely is not, and where it is over the threshold it is written off over six years, which is the period BGR7 names for "Guillotines". Consumables are a separate and simpler answer: laminating pouches, binding combs, whiteboard markers and cleaner are ordinary stationery, deducted as spent. Same R7 000 per item rule as everything else in this office equipment group, see EX-OFF-001.

Rent for premises you use for the business is fully deductible in the year it is incurred.

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This is the cleanest deduction in the category: it is recurring, it is for the use of premises in the trade, and it is not capital. Operating costs recovered by the landlord, such as a share of rates or common area charges, are deductible on the same basis. A VAT vendor claims input tax on the rental invoice where the landlord charges VAT, which is normal for commercial property.

A safe bought for the business is equipment written off over its useful life, with the installation cost normally forming part of the asset's cost.

Written off over time, not all at once · Sole proprietor or freelancer

The purchase price plus the cost of getting it installed and usable is what you write off under s11(e) over the accepted period. A small domestic safe may fall under the small item threshold. If the safe is built into the structure of a building you own it can become part of the building rather than a movable asset, which changes the treatment.

A normal office shredder is cheap enough to write off in full in the year you buy it, and an outsourced shredding service is a deductible monthly cost.

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A desktop or small office shredder sits comfortably under the small item write off threshold. A heavy duty industrial shredder can exceed it and would then be written off under wear and tear. Secure destruction of personal information is a POPIA obligation for most businesses, so a shredding service invoice is an ordinary and necessary cost of the trade.

A cheap or temporary sign is a deductible advertising cost, while a permanent installed sign is an asset written off over time or, if it becomes part of the building, capital.

The answer turns on the facts · Sole proprietor or freelancer

Banners, window vinyl, printed boards and replacing worn signage read as advertising and maintenance, deducted as incurred. A large fabricated pylon or illuminated fascia sign is a durable asset and normally attracts wear and tear over its useful life. If the sign is bolted into a building you own and becomes part of the structure, it may follow the building instead. Municipal signage approval fees are ordinary deductible costs.

The equipment is written off over time or, if cheap, in full, and the music licence fee you have to pay to play music in a business is a separate deductible running cost.

Written off over time, not all at once · Sole proprietor or freelancer

A small bluetooth speaker will fall under the small item write off; an installed system will not and attracts s11(e) over its useful life. Separately, playing recorded music in a commercial space in South Africa generally requires licences from the relevant collecting bodies, and those annual fees are ordinary deductible business expenses.

A staff function is generally deductible for income tax as a cost of employing people, but the VAT input tax on the food and drink is denied as entertainment.

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The income tax deduction rests on the function being incurred for the business, typically as part of staff welfare and retention rather than the owner's private enjoyment. The VAT denial applies to the catering, venue and drinks because they fall in the entertainment definition. There can also be an employees' tax angle if what is provided to a particular employee looks more like remuneration than a general staff benefit, so a modest general function is safer ground than a large personal benefit to one person.

Everyday stationery, paper, ink and toner used in the business are deductible in full in the year you buy them.

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These are consumed in the ordinary course of trade and there is no capital question at all. VAT input tax is claimable on a valid tax invoice. Where the household and the business share a printer, apportion the consumables on a defensible basis rather than claiming the lot.

Renting storage for business stock, equipment or records is a deductible running cost.

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It is rent for space used in the trade, deducted as incurred. Off site document archiving is deductible on the same basis, and is often incurred precisely to meet the record retention obligation, which requires records to be kept for a set period after submission. Where a unit stores both household goods and business stock, apportion and be able to explain the split.

A television used in the business is written off over its useful life under wear and tear, and the subscription and TV licence for it are separate running costs.

Written off over time, not all at once · Sole proprietor or freelancer

Most screens cost more than the small item threshold, so the s11(e) allowance applies over the accepted write off period. A DStv or streaming subscription for a reception area is deductible only to the extent it serves the business, and a subscription that is really for the owner's home is not. Television licence obligations are a separate regulatory matter with their own rules for business premises.

Washroom consumables and a monthly hygiene service at the business premises are ordinary deductible running costs.

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These are consumed in the business and deducted as incurred. A monthly hygiene contract covering sanitary bins, soap dispensers and servicing is a service fee, deducted the same way, and input tax is claimable by a VAT vendor. Dispensers installed and owned by the service provider are their asset, not yours, so nothing to depreciate.

What you pay someone to clean the business premises is deductible, but paying a person creates registration and payroll duties that most small businesses ignore.

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If the cleaner is your employee, the wage is deductible under s11(a), and you sit inside the Fourth Schedule employees' tax rules, UIF and, depending on payroll size, the Skills Development Levy. If you use a contract cleaning company, it is simply a service invoice you deduct and on which a VAT vendor can claim input tax. Compensation Fund registration is a separate labour law obligation that comes with employing anyone.

Water for staff and visitors and the monthly rental or refill bill are ordinary running costs of the premises and are deductible.

You can claim this · Sole proprietor or freelancer

If you rent the cooler, the monthly rental is simply deducted as incurred. If you buy the cooler outright it is equipment, and price decides between an immediate small item write off and wear and tear. The bottles and refills are consumables deducted as spent. For VAT the position is less comfortable than it looks, because supplying drinks to staff and visitors can fall within the entertainment definition, and input tax on entertainment is denied.