Buying a bakkie or light delivery vehicle for the business
Wear and tear
Same income tax treatment as a car, written off over time for the business share, but the VAT answer can be completely different.
Written off over time, not all at once · Sole proprietor or freelancer
For income tax a bakkie is written off under wear and tear like any other vehicle, apportioned for private use. The important difference is VAT: a single cab bakkie is generally constructed mainly for carrying goods and so falls outside the VAT definition of a motor car, meaning a registered vendor can claim the input tax. A double cab is generally treated as a motor car and the input tax is denied. See the separate VAT items.
Where people go wrong
Assuming every bakkie lets you claim the VAT. Buyers pick a double cab for the family and then find the input tax is blocked, which is a real cash cost on a bakkie priced in the hundreds of thousands.
Does buying it save you tax?
If you genuinely carry goods, a single cab is the more tax efficient buy on the VAT side alone. But the income tax deduction is still just a slow write off at your marginal rate.
Authority s11(e)
excluded by Motor car input tax is denied
governed by Wear and tear on business assets
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Farm bakkie running costs
Apportioned
Running a bakkie on the farm is deductible for the farming use, and you have to be able to show the split between farm and private kilometres.
Claim the business share only · Farmer
Fuel, servicing, tyres, insurance and licence are deductible to the extent the vehicle is used in the farming operation. The vehicle itself is written off, though the write off basis for a passenger vehicle is not the same as for a tractor. On a farm the private portion is rarely zero, because the same bakkie fetches the children and goes to town.
Where people go wrong
Claiming one hundred percent because the bakkie never leaves the farm. Keep a simple logbook or at least a defensible basis. VAT is a separate trap: input tax on a double cab used as a passenger vehicle can be denied even where the income tax deduction is fine.
Work out your share
Enter a cost and a percentage. The percentage has to be one you can defend with
something real, floor area for a room, a logbook for a vehicle, an itemised bill
for a phone.
Does buying it save you tax?
Real cost of farming, claim it properly. Do not buy a bigger bakkie because it is deductible.
Authority s11(a) read with s23(g)
excluded by Motor car input tax is denied
governed by General deduction for expenditure in producing income
Farming
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Car wash and valet for a work vehicle
Apportioned
Yes, it is a running cost, but only the business share and it is a small number.
Claim the business share only · Sole proprietor or freelancer
Keeping a vehicle used in the trade presentable is an ordinary running cost, deductible in the same business proportion as fuel and servicing. A branded vehicle used to visit clients has an easy business argument. A travel allowance holder using the deemed cost table cannot add it on top.
Where people go wrong
There is not much of a trap here beyond apportionment, but people over claim small cash items with no slip. No slip, no proof, and a pile of unsupported small claims is what makes SARS look harder at the big ones.
Work out your share
Enter a cost and a percentage. The percentage has to be one you can defend with
something real, floor area for a room, a logbook for a vehicle, an itemised bill
for a phone.
Does buying it save you tax?
Marginal. Claim it if it is on the card statement, do not build a filing system around it.
Authority s11(a)
governed by General deduction for expenditure in producing income
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Delivery van or panel van, where the VAT is claimable
VAT input only
A vehicle constructed mainly to carry goods is not a motor car, so a VAT vendor can generally claim the input tax on it.
No income tax relief, but VAT may be claimable · Company
Panel vans, single cab bakkies and trucks are built to carry goods rather than passengers, so they fall outside the VAT definition of a motor car and the s17(2)(c) denial does not apply. A vendor using the vehicle to make taxable supplies can claim the full input tax on the purchase price, subject to holding a valid tax invoice and apportioning if the vehicle is also used for non taxable purposes. For income tax the treatment is the same as any vehicle: written off over time under wear and tear, apportioned for private use.
Where people go wrong
The whole answer turns on how the vehicle is constructed, not what you call it or what you use it for. A double cab used only for deliveries is still a motor car and still denied. A single cab converted to carry passengers can move the other way. Check the specific model against the definition, and keep the reasoning on file.
Does buying it save you tax?
This is one of the few places where a purchasing decision genuinely changes the tax outcome by a large amount. If you are a registered vendor buying a work vehicle, the difference between a van and a double cab is real cash, not a marginal rate saving.
Authority VAT Act s17(1)
governed by Wear and tear on business assets
governed by Input tax on capital goods
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
New tyres for a work vehicle
Apportioned
Tyres are a running cost, deductible for the business portion of the vehicle's use.
Claim the business share only · Sole proprietor or freelancer
Replacing worn tyres restores the vehicle to working condition, so it is a repair and running cost rather than an improvement. Claim the business share. If you have a travel allowance and use the deemed cost table, maintenance is already built into that rate and you cannot claim tyres on top.
Where people go wrong
A travel allowance holder claiming tyres separately in addition to the deemed cost rate. You choose one method, actual costs or deemed, not a mix of the two.
Work out your share
Enter a cost and a percentage. The percentage has to be one you can defend with
something real, floor area for a room, a logbook for a vehicle, an itemised bill
for a phone.
Does buying it save you tax?
Tyres are unavoidable safety spend. Claiming the business share is correct, but nobody is better off buying tyres for the deduction.
Authority s11(a)
excluded by Deemed cost table versus actual vehicle costs
governed by General deduction for expenditure in producing income
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Staff transport to and from work
Deductible
The cost of transporting staff is deductible, and free transport in a company vehicle is normally not a taxable benefit for the employee.
You can claim this · Sole proprietor or freelancer
Fuel, the driver, the shuttle contract or the taxi money are all business costs and deduct. On the employee side, the Seventh Schedule generally does not tax transport that the employer supplies for employees as a group between home and work in a vehicle used for that purpose. A cash transport allowance is different: cash paid to the employee is remuneration and is taxed. Input tax on a motor car as defined is denied for VAT, though a bus or a bakkie may fall outside that definition.
Where people go wrong
Paying cash instead of providing transport. A transport allowance in cash is taxed as remuneration, while the same value provided as an actual shuttle is generally not, so employers hand employees a worse outcome for the same money. Second trap: claiming VAT input tax on a vehicle that meets the motor car definition.
Does buying it save you tax?
Providing the transport rather than paying an allowance is usually the better structure for both sides. Deductible either way, but the employee keeps more when it is provided in kind.
Authority s11(a)
excluded by Motor car input tax is denied
governed by General deduction for expenditure in producing income
Staff
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Tracker unit fitted to a vehicle
Wear and tear
The physical unit and its fitment is an asset written off over time, not an expense in the year, unless it is small enough for the immediate write off.
Written off over time, not all at once · Sole proprietor or freelancer
A tracking device fitted to a business vehicle is a capital item written off under wear and tear. Where the cost of the unit falls below the small item threshold SARS accepts for immediate write off, it can be claimed in full in the year. Apportion for private use of the vehicle. If it was fitted as a condition of the insurance, it is still capital, not part of the premium.
Where people go wrong
Bundling the once off unit and fitment cost into the monthly subscription line and claiming the whole lot as an expense. They are two different things with two different treatments.
Does buying it save you tax?
You fit a tracker to keep the vehicle, not to save tax. The write off is small and slow.
Authority s11(e)
governed by Wear and tear on business assets
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Trailer bought for the business
Wear and tear
A trailer used in the trade is written off over time under wear and tear, and it is not a motor car for VAT.
Written off over time, not all at once · Sole proprietor or freelancer
Treat the trailer as a separate asset from the towing vehicle, with its own write off period, and apportion for any private use. Because a trailer is not a self propelled passenger vehicle, it falls outside the VAT definition of a motor car, so a registered vendor can generally claim the input tax on it. Licensing and maintenance of the trailer are running costs.
Where people go wrong
Adding the trailer to the cost of the bakkie and writing it off over the vehicle's period. They are separate assets and SARS accepts different write off periods for different asset classes.
Does buying it save you tax?
If you actually need to carry loads, the VAT on a trailer is claimable where the VAT on a double cab would not be, which makes it a cheaper way to add capacity.
Authority s11(e)
governed by Wear and tear on business assets
may unlock Input tax on capital goods
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Vehicle branding and a full vehicle wrap
Deductible
The cost of branding or wrapping a vehicle is normally deductible advertising, even though the vehicle itself is not.
You can claim this · Sole proprietor or freelancer
The wrap has a short life, gets removed or replaced, and its purpose is advertising, so it is usually expensed rather than added to the cost of the vehicle. Removal and replacement costs are treated the same way.
Where people go wrong
Believing that wrapping your private car turns it into a business vehicle and unlocks the running costs. It does not. Branding a car changes nothing about how the fuel, insurance and wear and tear are apportioned, and it does not create business kilometres. You still need a logbook, and for VAT registered users the motor car input tax denial still applies to the car itself.
Does buying it save you tax?
The wrap is deductible, the car is not. Wrap the vehicle for the exposure, and do not let anyone tell you it converts private travel into business travel.
Authority s11(a)
excluded by Travel allowance deduction against business kilometres
excluded by Motor car input tax is denied
governed by General deduction for expenditure in producing income
Marketing
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Vehicle insurance premiums
Apportioned
Insurance on a vehicle used in your trade is deductible for the business use portion.
Claim the business share only · Sole proprietor or freelancer
The premium is an ordinary running cost of the vehicle, apportioned by business kilometres. Where the policy covers several vehicles or a household, only the portion relating to the business vehicle and its business use qualifies. A payout you receive later is not free money, it may trigger a recoupment against the amounts you have written off.
Where people go wrong
Claiming the whole household short term insurance premium because the car is on the same policy. Get the schedule and use the line item for the vehicle, then apportion that.
Work out your share
Enter a cost and a percentage. The percentage has to be one you can defend with
something real, floor area for a room, a logbook for a vehicle, an itemised bill
for a phone.
Does buying it save you tax?
A legitimate claim on a cost you must carry anyway. It is not a reason to over insure.
Authority s11(a)
governed by General deduction for expenditure in producing income
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Vet's practice equipment, drugs and SAVC registration
Depends
Surgical equipment and imaging are written off over years; drugs, vaccines and consumables are deducted as you use them, and SAVC registration is a running cost.
The answer turns on the facts · Sole proprietor or freelancer
An anaesthetic machine, X-ray unit, surgical table and autoclave are equipment on wear and tear. Vaccines, anaesthetics, sutures and dressings are consumable stock deductible as used, with stock on hand at year end added back. SAVC registration, practice insurance and practice management software are deductible in the year. A bakkie used for farm and mobile calls is a vehicle with its own rules, and you need a logbook to support the business portion.
Where people go wrong
The practice bakkie used for weekend trips as well as farm calls. Without a logbook the business portion is guesswork, and SARS disallows guesswork. Start the logbook on 1 March, not when the audit letter arrives.
Does buying it save you tax?
The recurring practice costs are worth claiming carefully. Equipment purchases should be driven by clinical need, since the tax relief arrives slowly.
Authority s11(a), s11(e), s22
governed by General deduction for expenditure in producing income
governed by Wear and tear on business assets
may unlock Business travel, flights and accommodation
Trades and professions
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Car hire or rental car
Deductible
The rental cost of a car hired for a business trip is deductible, but the VAT on hiring a motor car is denied just as it is on buying one.
You can claim this · Sole proprietor or freelancer
Hire charges, the fuel you put in, and the waiver or excess reduction on a business trip are deductible for income tax. The VAT denial on motor cars applies to the rental of a motor car as well as its purchase, so a vendor generally cannot claim the input tax on the hire charge. Hiring a bakkie or a panel van instead may change that answer.
Where people go wrong
Vendors routinely claim input tax on rental car invoices because the invoice shows VAT. Showing VAT does not mean it is claimable. Also, days added to the front or back of a trip for a private weekend must be excluded.
Does buying it save you tax?
Straightforward and worth claiming on a real business trip. If you hire vehicles often as a vendor, look at whether a van meets your need, the VAT difference is material.
Authority s11(a)
excluded by Motor car input tax is denied
governed by Business travel, flights and accommodation
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
JoJo water tank at your own home
Not deductible
A water tank at your private home gives you no tax relief of any kind.
There is no relief for this · Anyone
There is no deduction because there is no trade. Whether it even reaches base cost depends on how it is installed: a tank bolted to a plinth and plumbed into the house is an improvement to the property, while a freestanding tank you could load onto a bakkie is a movable personal use asset and personal use assets are disregarded for capital gains tax.
Where people go wrong
Confusing this with the solar energy rebate for individuals. That rebate is narrow and is about generation equipment, not water storage. There is no water tank equivalent.
Does buying it save you tax?
No tax benefit. Buy it for water security.
Authority s23(a)
excluded by Salaried employees cannot deduct ordinary work costs
governed by Personal use assets are disregarded
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
VAT input tax on buying a motor car is denied
Not deductible
A VAT vendor cannot claim the input tax on buying or hiring a motor car, no matter how much it is used for business.
There is no relief for this · Company
The VAT Act specifically denies input tax on the supply of a motor car to a vendor, and the denial applies to purchase, rental and to the cost of certain related supplies. A motor car for this purpose is a vehicle constructed or converted mainly for carrying passengers, which catches sedans, hatchbacks, station wagons, most SUVs, minibuses and double cab bakkies. Limited exceptions exist, principally where the vendor's trade is dealing in or renting out those vehicles. There is a separate rule allowing input tax on a motor car acquired for the purpose of making a taxable supply of that same car.
Where people go wrong
Buying a double cab bakkie in the belief it is a commercial vehicle and claiming the VAT. It is a motor car for VAT and the claim is denied, which on a modern double cab is a very large number to have to pay back with penalties and interest. Confirm the vehicle against the definition before you sign.
Does buying it save you tax?
There is nothing to claim, so the only saving is in the choice of vehicle. If you are a vendor and you need to carry loads, a single cab or a van gets you the input tax that a double cab never will.
Authority VAT Act s17(2)(c)
excluded by Motor car input tax is denied
governed by Input tax on capital goods
Vehicles and travel
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
