Taxpayers who claim a deduction for business travel must, if they haven’t already done so, urgently implement and maintain a detailed logbook that records all of their travel, both personal and business.
SA Revenue Services (SARS) no longer allows the first 18 000km to be deemed personal travel and the balance, up to a maximum of 14 000km, to be accepted as business travel.
The portion of the monthly travel allowance that will be taxed upfront and subject to Pay As You Earn (PAYE) has risen from 60% to 80%,” says Grant Lloyd, MD of payroll software specialist Softline Pastel Payroll.
“SARS will not countenance any claims for tax deductions against a travel allowance unless the claims are supported by complete logbooks. The mileage recordings can be submitted as hard copy in a notebook or electronically using either spreadsheet software or an online/electronic logbook facility. Keeping a logbook is compulsory if a travel claim is to be made and doing it electronically is easy and accurate, with effect from 01 March 2010.”
Taxpayers who receive a travel allowance may claim a deduction for the use of their private vehicle for business purposes. However, this has to be done properly and the process is as follows:
* Record the vehicle's odometer reading on 01 March each year (the first day of the new tax year for individuals) and again on the last day of February the next year (the last day of the tax year for individuals). These opening and closing readings provide the total kilometres travelled for the year.
* Record all of the mileage done with the vehicle, both personal use and business use on a daily basis to ensure an accurate travel claim is submitted with the tax return.
At the end of February when the tax year closes, the logbook provides the detail needed to accurately calculate the kilometres travelled on personal or private use and on business use.
Lloyd says SARS may request additional information or support documentation when a return with a travel claim is submitted. If a hard copy record has been kept in a paper logbook it will have to be either physically delivered to the particular SARS office or posted. An electronic logbook is easier and can be uploaded to SARS using eFiling.
To assist taxpayers, Pastel Payroll has produced a free online Travel Logbook that keeps track of all travel throughout the tax year and provides a summary at the end of the year. It is fully compliant with SARS requirements and simple – kilometres travelled, destination details and any additional expenses like fuel and maintenance are entered and the information is stored securely until it is needed for the income tax filing season.