TAX CLAIMS DUE TO LOAD SHEDDING

 

Load shedding is an economic disaster.

 

It destroys jobs, leads to unnecessary expenses and causes businesses to close their doors. Exactly the opposite of what political parties promise when they stand for election.

 

Is their some tax benefits you can get due to load shedding? Let's have a look.

 

Tax expense claims due to load shedding

 

  • If a machine, computer, electrical tool or item stops working as a result of load shedding and it needs to be repaired, you can claim 100% of the repair cost.

  • If you buy diesel for a generator 100% of the cost can be claimed.

  • If an insured machine or similar item stops working and you pay an insurance excess you can claim 100% of the excess.

  • Any severance pay or similar expenses you pay staff you have to lay off due to load shedding.

  • Any overtime you pay staff having to work outside of normal business hours due to load shedding.

  • When an asset is damaged beyond repair or in a state where you can no longer use it for business, you can claim a scrapping allowance. If only a portion of the cost of an asset has been claimed via wear and tear or a similar allowance, the unclaimed portion can be claimed as a scrapping allowance.

 

Claims due to buying assets or making investments in assets to combat the result of load shedding.

 

  • If you buy any asset to combat load shedding and the asset costs you less than R7000, you can claim 100% of the cost. An example is a USP for your computer.

 

Section 12B of the Income Tax Act also allows the following deduction

 

Requirements to qualify

  • If you buy any machinery, utensils, implements or articles either outright or by installment sales agreement or

  • make improvement to such assets and

  • the asset(s) above are used in your trade for the production of electricity from wind power, solar energy, hydropower or biomass comprising organic waste landfill gas or plant material

 

What can be claimed

  • 50% of the cost in year one, 30% in year two and 20% in year three

  • If the equipment you use generate photovoltaic solar energy of less than one megawatt, 100% of the cost can be claimed. An example is solar panels.  

 

For any help with your taxation please contact us.