ABC (Pty) Ltd is a resident of the Republic. Its sole asset is a rent-producing property. The ground floor of this building is let to commercial tenants. The remaining two floors are let to residential tenants. Since ABC (Pty) Ltd makes both taxable and exempt supplies for value-added tax purposes, a turnover-based method of apportionment has been applied to arrive at an acceptable input tax ratio of 40%, when applicable. ABC (Pty) Ltds receipts and accruals and expenditure for its two-month tax period ending 31 October 2022 are as set out below. (All amounts

are inclusive of value-added tax when applicable.) Receipts and accruals	R		R
Commercial rentals	155	250
Residential rentals	204	700
Interest levied on overdue rentals from commercial tenants			6 831
Interest levied on overdue rentals from residential tenants			2 944
Insurance settlement (note1)	181	930
Expenditure
Bank charges	2	875
Audit fees	14	375
Salaries	33	350
Repairs (note 2)	224	250
Maintenance (note 3)	16	675
Insurance premiums (note 4)	15	525
Interest incurred on mortgage bond	43	125
Legal expenses for new leases entered into
for new commercial tenants			1 725
for new residential tenants			2 530
Security maintenance contract expenditure			4 025
Bad debts (note 5)	16	330
Entertainment expenditure (note 6)			690
Telephone (note 7)			805

1

Notes

1. The insurance settlement of R181 930 received by ABC (Pty) Ltd was for fire damage to its building. A fire had occurred at a laundry situated on the ground floor. The fire damaged the laundry and the flat situated directly above it. Compensation for the laundry was R115 000, and compensation for the flat was R66 930.
2. It cost ABC (Pty) Ltd R138 000 to repair the burnt laundry. It cost R86 250 to repair the burnt flat.
3. ABC (Pty) Ltds maintenance costs of R16 675 include paint, paint brushes and other hardware items purchased so as to carry out repair work to its building.
4. ABC (Pty) Ltds premiums of R15 525 were incurred for the insurance of its building.
5. ABC (Pty)Ltds bad debt of R16 330 is made up of debts written off for commercial rental debtors of R9 890 and for residential rental debtors of R6 440.
6. The managing director of ABC (Pty) Ltd had lunch with its lawyer during this two-month period. He takes its lawyer to lunch from time to time to ensure that it always enjoys preferential treatment from her when it needs her professional services. The lawyers lunch cost R529, and the managing directors lunch cost R161.
7. ABC (Pty) Ltd pays the caretakers home telephone account. He has to make business telephone calls on a regular basis. He has indicated that 70% of his telephone calls are for it. His telephone account for this two-month period was R805. He is a part-time employee of it.
8. In September 2021, ABC (Pty) Ltd bought paint to be used to paint the exterior of its building for R23 940 (R21 000 plus value-added tax at 15% of R2 940) from a local supplier. It enjoyed an input tax deduction of R1 176 (40% of R2 940) in its tax period 1 September 2021 to 31 October 2021. It encountered quality problems with this paint, and paid the supplier only R17 955 (R15 750 plus value-added tax of R2 205) on 31 October 2021. It refused to settle this account until the quality problems were resolved. On 1 October 2022, R5 985 (R5 250 plus value-added tax of R735) was still outstanding, despite numerous letters of demand having been received from its supplier.

REQUIRED:

Determine the value-added tax due to, or from SARS, for ABC (Pty) Ltd two-month tax period

ending 31 October 2022