SARS: What can I claim for?

 

There are many theories and myths about exactly what kinds of travel you can claim for when filing your tax return with SARS. Many of them may have been correct at one time, but due to the changing laws and amendments, have fallen away. The following is some useful advice from Johan Swart, tax manager at one of the largest firms in South Africa, Legal & Tax, first posted on businesslive.co.za (a Times South Africa affiliate):

 

South Africa's tax laws make provision for you to claim a deduction for the use of your private vehicle to fulfill work tasks, but doing so is no longer as straightforward as it was.

 

To be able to claim travel expenses you must receive a travel allowance or you must earn most of your income in the form of commission.

 

In the past, you could simply use your odometer readings at the start and close of the tax year and SARS would deduct private use from your calculation of your travel expenses for the tax year. This is not the case any more - you must keep a logbook specifying each business trip.

 

SARS may ask to see your logbook up until five years after the present tax year. Commuting to work is considered private travel and cannot be claimed as a business expense. You can calculate your claim in two ways. You can use the SARS cost tables to link the costs of your travel to the value of your vehicle, which is ideal if you haven't been diligent about holding onto invoices. If you receive a travelling allowance, this method will work to your advantage in the majority of cases.

 

You can also use the actual costs to calculate your claim. If commission is your primary source of income, this is the only way you can claim travelling expenses. This is only possible if you have accurate records about how much you spent on petrol, repairs and maintenance, insurance and so on. You must have proof of all expenses in the form of invoices, account statements, et cetera.

 

If you have kept a logbook, you would calculate your business travel simply by adding up your business trips during the tax year (March 1 to February 28 the following year).

 

That means you need to record the distance of your trip to make that delivery or to see that client when you get into your car to use it for business.

 

If you haven't kept a logbook this year, you will not be able to claim a travel deduction unless you can find details of all your trips in your diary and calculate the distance you travel for business from that.

 

It's not advisable unless you are really sure of your business mileage.

 

Keeping a logbook is simple, so be sure to start doing so immediately if you qualify for travel deductions.

 

Any little journal will do. Just record the date, odometer reading, trip distance, and the purpose of the trip each time you get in your car for business travel.

 

Then, at the end of the financial year, enter your opening and closing odometer readings for the year and fill in the business travel.

 

If you use e-filing, the system will do many of the calculations for you.

 

To make some of your return claims easier to manage if you are one of the individuals or companies that keeps mandatory logbooks, check out The Little Logbook’s new GPS Logging system. Visit the website or contact (011) 050-0999. You can also send an e-mail to sales@littlelogbook.co.za