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Whether you’re self-employed, a business owner or a corporate employee, tracking your travel and fuel expenses is crucial for business and tax purposes. But when your work day is jam-packed, logging your kilometres and expenses can be as painful as stepping on a piece of Lego®. All taxpayers are required to use a logbook when claiming against a travel allowance for the year of assessment. Without a detailed logbook, you won’t be able to claim a deduction against your travel allowance from SARS.
When can I claim for travel? If you receive a travel allowance, you can claim a deduction for the use of your private vehicle for business purposes. You may only claim travel expenses if you received a travel allowance that will be reflected as code 3701 and/or 3702 on your IRP5/IT3(a) and keep a logbook. If you receive a travel allowance, you have to claim travel expenses based on the actual business kilometres travelled, excluding kilometres travelled to and from work. Travel between your home and place of work cannot be claimed, as this is regarded as private travel.
What do I need to do before I can claim? Keep a detailed logbook throughout the year. You need to record your vehicle’s odometer reading on 1 March (on the first day of a tax year) and again on the last day of February of the next year (on the last day of the applicable tax year). The difference between the closing and opening odometer readings will give you your total kilometres travelled for the year. Your logbook must include the following minimum information for each trip:
- the date of travel
- where you started your trip and where you ended your trip
- the kilometres travelled
- categorise your trips as business or private
- the reason for the trip
In addition to keeping a logbook, you have to maintain an accurate record of all your related expenses during the year, including fuel, oil, repairs and maintenance, car licence fees, insurance, as well as wear and tear. You must also keep your logbook and related documents for a period of at least five years, as you may be required to submit it to SARS to back up your claim. If you didn’t keep an accurate record, you can use the table of costs linked to the value of your vehicle supplied by SARS each year. Go to www.sars.gov.za/Tax-Rates
How is my travel claim calculated? To enable SARS to calculate your claim, you must provide the following information:
- the cost price or cash value of the vehicle
- opening and closing kilometres (odometer reading)
- starting date (usually 1 March) and closing date (usually the last day of February)
- total business kilometres travelled
You can calculate your claim using the calculator on the GPS Log Book website, based on the 2015/2016 SARS cost table, which will provide you with an approximate claim amount. For example, if your car is valued between R80,001 and R160,000 and you travel approximately 20,000 km per annum, of which 50% is business related, the estimated claim amount from SARS should be approximately R25,095.
How do I submit a claim? Your travel claim forms part of your Tax Return that you submit annually to SARS. This can be done by visiting SARSefiling and completing the travel allowance section on the website. Alternatively, contact your tax advisor who will be able to assist you further. A complete and detailed logbook may well result in a tax refund, based on the information supplied, but incomplete or inaccurate information could result in SARS rejecting your travel claim, leaving you with a potential tax liability.
Top Tip: If you want to effortlessly and conveniently upload your travel information to ensure you provide SARS with a detailed and compliant logbook report, then investing in an electronic GPS Log Book is the way to go! It automatically generates a SARS compliant report based on the information the device has logged throughout the year. The device simply plugs into the 12 Volt cigarette-lighter socket of your vehicle and accurately records the time, location and speed of your vehicle at any point of the journey. It will automatically record whether it is a private or business trip based on your ‘zones’ you have created with Google Maps, so you will never have to backtrack through your calendar to remember where you travelled!
For more information or to purchase your GPS Log Book device, visit the secure www.gpslogbook.co.za website. The GPS Log Book is also available at Tiger Wheel & Tyre nationwide or shop online at takealot.com.
