Completing The Travel Allowance Section


1. Travel claim against a Travel Allowance

Top Tip: All taxpayers are required to use a logbook when claiming against a travel allowance for the year of assessment.

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.

How to determine kilometers travelled

If you received a travel allowance you have to claim travel expenses based on the actual business kilometres travelled excluding kilometres travelled to and from work.

  • Logbook
    • If you have a properly completed logbook to record actual business kilometres travelled select the “Y” next to the question “Did you use a logbook?”
    • The minimum information needed for a logbook is:
      • Date on which the travel took place
      • The destination to and from
      • The kilometres travelled
      • The reason for the travel.
    • The following fields must be completed:
      • The vehicle registration number
      •  The make of the vehicle
      • The model of the vehicle
      • The year manufactured
      • The cost price or cash value of the vehicle

Calculation of the travel claim

To enable SARS to calculate your claim it is important that you provide the following information:

  • The cost price or cash value of the vehicle
  • Opening Total kilometres (odometer readings)
  • Start and end dates
  • Closing kilometres (odometer readings)
  • Business kilometres travelled.

 

EXAMPLE OF TRAVEL CLAIM AGAINST ALLOWANCE SECTION OF RETURN


 Top Tip: Without this information SARS won't be able to calculate the travel claim.

  • Travel expenses against a travel allowance can be claimed according to one of the following methods:
    •  Where accurate records of expenses have been kept: Complete the applicable items under the sub heading “Where Records of Actual Expenditure were kept?”
    • Where no records of expenses were kept: The cost of scale table will be used to calculate your claim if you didn't complete the line items relating to the actual expenditure.

2. Employer provided vehicle other than an operating lease

  • This section of the return may only be completed as from the 2012 year of assessment.
  • You may claim a deduction against a fringe benefit for an employer provided vehicle if you received income indicated as either source code 3802 and/or 3852 and the amount is captured on the tax certificate page on the ITR12.
  • If you received an employer-provided vehicle allowance you have to decrease the fringe benefit allowance based on the actual business kilometres travelled.

 

Calculation of the business kilometer claim

  • To enable SARS to calculate your business kilometer claim it is imperative that you provide the following information: 
    • The cost price or cash value of the vehicle
    • Opening kilometres (odometer readings).
    • Start and end dates
    • Closing kilometres (odometer readings)
    • Business kilometres travelled.
    • Fringe Benefit Value
       

EXAMPLE OF EMPLOYER PROVIDED VEHICLE OTHER THAN OPERATING LEASE SECTION OF RETURN



3. Full cost incurred by the employee (no reimbursement by the employer)

It's assumed that all operating expenses are incurred by the employee.  Due to this assumption, on assessment you are entitled to reduce the fringe benefit calculation with cost incurred for business travel purpose.

  • Indicate by selecting “Y” or “N” whether you paid the full cost in respect of the following expenses:
    • Insurance
    • License Fees
    • Maintenance
    • Fuel.
  • Declare the total amount incurred for each expense as indicated on the return, except for fuel.
  • Select “Y” or “N” to indicate whether a maintenance plan was included in the purchase price of the vehicle provided by your employer.
     

EXAMPLE OF FULL COST INCURRED BY EMPLOYEE SECTION OF RETURN

 

4. Employer provided vehicle operating lease

  • This legislative change to employer-provided motor vehicles (company cars) is effective from 1 March 2013 and is applicable to years of assessment from 2014 onwards
  • The lease agreement must satisfy the following conditions to be defined as an operating lease:
    • The employer must lease the vehicle from a lessor in the ordinary course of the lessor’s business (not being a banking, financial services or insurance business)
    • The vehicle must be available to lease to the general public for a period of less than a month
    • The costs of maintaining the vehicle (including any repairs due to normal wear and tear) must be borne by the lessor and
    • Subject to the claim a lessor may have against a lessee (e.g. employer) for failing to take proper care of the vehicle, the risk of loss or destruction of the vehicle must not be assumed by the lessee (e.g. employer).
  • Where the above-mentioned requirements are not met (e.g. lease is defined as a finance lease), the fixed percentage per month of determined value method must be used to calculate the ‘value of private use’. The calculation must be declared under “Employer provided vehicle other than under an operating lease”.
  • You may claim a deduction against a taxable benefit for the use of the motor vehicle acquired by employer under operating lease. If you received fringe benefit indicated as source code 3816 and the amount is captured on the tax certificate page on the ITR12.

How to determine kilometers travelled

  • If you received an employer-provided vehicle allowance you have to reduce the fringe benefit allowance based on the actual business kilometres travelled.
    •  Logbook
      • If you have a properly completed logbook to record actual business kilometres travelled select the “Y” next to the question “Did you use a logbook?”The following fields must be completed:
      • The vehicle registration number
      • The Fringe Benefit Value – employer must provide you with the letter specifying the value for each vehicle for the period of use.

 EXAMPLE OF EMPLOYER PROVIDED VEHICLE OPERATING LEASE SECTION OF RETURN



5. Travel expenses (no allowance e.g. commission income)

If you didn't receive a travel allowance but incurred travel expenses in the production of your income, you may claim a deduction if you are in possession of a properly completed logbook with record of actual business kilometres travelled. The amount of your claim must be filled in next to code 4015.


6. Use of motor vehicle

The deduction is applicable to 2011 year of assessment and before. From 2012 year assessment, all the taxpayers are required to make use of the “Employer provided Vehicle” above.

  • Where you have been allowed the use of a motor vehicle, which is supplied by your employer and you have travelled less than 10 000 km, for private use, for the year of assessment, you must keep accurate records in the form of a logbook.
  • A deduction may be claimed and must be entered next to code 4046.
Last Updated: 22/08/2017 11:20 AM     print this page
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