Demand-ranked tax questions · Business · Question 04 of 20
Which expenses cannot be claimed for input VAT?
A VAT vendor may generally deduct input tax only when the purchase is used to make taxable supplies and the required documentary proof is held. Passenger motor cars and entertainment are prominent blocked categories, subject to defined exceptions. Private or exempt-use portions are also not deductible.
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The points that decide the answer
- A bank payment is not a substitute for a valid tax invoice where an invoice is required.
- Entertainment includes hospitality and refreshments, but the VAT Act contains fact-specific exceptions.
- Input tax on a passenger motor car is generally denied even when the vehicle is used in the business, unless a statutory exception applies.
- Mixed taxable, exempt and private use requires a defensible apportionment.
A practical way to handle it
- Confirm the supplier and invoice meet VAT requirements.
- Link the purchase to taxable business supplies.
- Test blocked categories and exceptions before posting the claim.
- Reconcile the VAT201 input total to a transaction-level schedule.
Common mistakes
- Claiming VAT from a quotation or statement
- Claiming every vehicle cost without classification
- Ignoring exempt or private use
What to keep on file
Tax invoices, credit notes, import documents, contracts, VAT schedules and apportionment workings.
Source and scope
Based on current SARS guidance, reviewed on 28 August 2026. This is general information, not tax advice. Rates, thresholds and outcomes depend on the tax year and your facts. Regulated submissions and advice are handled through registered partners where required.