Question

Question 1 (10 marks) Themba is a natural person who is a resident of South Africa. He runs his own business which makes him a sole proprietor. Thembas VAT registration is based on the payment basis of VAT. Thembas bank statement for the period of June was inclusive of the following items: | Cash receipts 68 400 Cash sales made in the republic of South Africa Consulting fees 50 000 Cash payments Bank charges Fuel Entertainment expenses Rentals paid Interest charged on overdraft 15 000 10 000 1 450 2 680 | 1 045 Required: Calculate the VAT that is payable to or refundable by the commission for the VAT period that ends on 30 August. NB - Your answers MUST be rounded off to the nearest rand.

Answer 1

VAT Rate in South Africa is 15%

VAT to be paid:

15% of (68400+50000) = R17760

VAT that can be reclaimed:

15% of (10000+2680) = R1902

[There is no VAT charged on bank charges, entertainment expenses and interest on overdraft. So, no VAT to reclaim]

VAT payable: R17760 - R1902 = R15858