SARS and Travel Claims:
During the last tax year we have seen an increase in queries raised by the South African Revenue Services with regards to claims in respect of travel.
Travel claims can be split into the following categories:
- Re-imbursive allowance: which is paid to an employee tax-free on condition that the employer does not apply a rate higher than the amount specified per SARS. For the 2019/2020 tax year, the re-imbursive allowance rate is R3.61 per km.
- Use of company car: the employee will be taxed on the determined value of the motor vehicle (including VAT) at a rate of 3.5% per month or 3.25% per month if a maintenance plan is acquired. If the vehicle is acquired under an operating lease, the taxable value is the cost incurred by the employer plus fuel. This allowance is taxed in the hands of the employee at either 80% or 20% depending on the amount of business use.
- Fixed travel allowance: the employee makes use of his/her own motor vehicle and the allowance is taxed at either 80% or 20% depending on the amount of business use.
- No allowance or re-imbursement: the employee is allowed to claim the depreciation on the cost of the motor vehicle used to the extent it is used for business travel.
- Self-employed OR Commission income: all expenses incurred can be claimed on actual expenditure incurred and claimed on assessment.
All of the above claims are subject to a claim only if a logbook is kept and record of your business claim is recorded in the format as SARS prescribes.
In respect of every business trip you must record the following:
- The date of travel
- The kilometers travelled
- Business travel details (where you started your trip, where you went and the reason for the trip)
Your travel between home and your place of work cannot be claimed for business purposes, as this is regarded as private travel. A separate logbook must be kept for each motor vehicle where more than one motor vehicle has been used for business travel during the year of assessment. Proof of the cost of the vehicle must be provided with your claim. Below is an extract of the format prescribed by SARS and an electronic e-logbook is available on their website: http://www.sars.gov.za/TaxTypes/PIT/Pages/Travel-e-log-book.aspx
Should you need further assistance contact Tracey Jones on +27 21 914 0261 or email email@example.com.
Article published by Tracey Jones, a registered Tax Practitioner and Director of C2M Tax Assurance.