We have workers who are collected on Monday mornings and dropped off in Bonnievale on Friday afternoons. As we are a working farm and 30Km away from Bonnievale we have to supply accommodation for the workers whilst they are at work. This is normal.We have built a new workers cottage, re-conditioned one cottage and built a flushing toilet, shower and wash-up area. Installed solar heating and lighting, and cooking facilities.We have claimed VAT on the materials used and Sars say that as we are not charging rental and paying VAT over to them we cannot claim the VAT back on materials.My husbands auditor in Durban said we are entitled to claim the VAT back and my accountants in Dbn say we are not allowed to?What is our position?Sars have said if I give them the Act that covers the VAT that can be claimed then they will accept that. So I have to do their work.Please could you help us on this?
Response by Muneer Hassan CASA, project director, Saica StandardsI had a look at section 12cii and agree that this is an exempt supply hence no input tax can be claimed on direct attribution method.