Hoousedown (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 Hoousedown (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. Hoousedown (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

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 2875

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 4025

Bad debts (note 5) 16 330

Entertainment expenditure (note6) 690

Telephone (note 7) 805

Notes

1. The insurance settlement of R181 930 received by Hoousedown (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.

It cost Hoousedown (Pty) Ltd R138 000 to repair the burnt laundry. It cost R86 250 to repair the burnt flat.

Hoousedown (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.

Hoousedown (Pty) Ltds premiums of R15 525 were incurred for the insurance of its building.

Hoousedown (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.

The managing director of Hoousedown (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.

Hoousedown (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.

In September 2021, Hoousedown (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.

YOU ARE REQUIRED TO determine the value-added tax due to, or from, SARS for Hoousedown (Pty) Ltds two- month tax period that ended on 31 October 2022.