If you use your own car to travel for business, you need to keep a SARS logbook to record how far you drive for business purposes. This logbook enables you to claim a deduction from income tax for business travel.
The Income Tax Act 58 of 1962 gives taxpayers who receive a travel allowance the right to claim this deduction if they use their private vehicles for business purposes, but travelling between home and work is not included.
Why must you keep a SARS logbook?
You have to keep an updated logbook or you will be unable to claim the costs of business travel against your travel allowance.
How do you keep a SARS logbook?
If you are an eligible taxpayer, you must keep a tax logbook firstly by recording your vehicle’s odometer reading on 1st March, the first day of the tax year.
Secondly you must update the logbook throughout the year and thirdly, record your vehicle’s closing odometer reading on the last day of February of the next year, which is the last day of the applicable tax year.
For each business trip, you must record the date, kilometres travelled and the details of the trip, such as where you started, where you went and the reason for the trip.
How much can you claim for?
You can either calculate your claim for travel by using the cost scale table supplied by SARS in the introduction to the travel eLogbook, or you can calculate your claim based on the actual costs.
[tip title=”moneysmart tip”]If you want to base your calculation on the actual costs, you have to keep an accurate record of all your expenses during the year in addition to keeping a logbook. These expenses include fuel, oil, repairs and maintenance, car licence, insurance, wear-and-tear and finance charges or lease costs.[/tip]
An easy way to keep a logbook
The easiest way to keep the logbook is to download the eLogbook from SARS which is available on the SARS website.
Keep these helpful tips from SARS in mind to ensure that you use your logbook properly:
- Ensure that you always record the opening and closing odometer readings for your travel claim to be considered.
- Make sure that you distinguish between business trips and private trips. Private trips are not deductable and it is compulsory to indicate business and private trips in your logbook.
- You can choose if you want to keep the logbook, but if you want to claim, you must have one. If you do not want to claim a deduction for travel, you do not have to keep a logbook.
What about a vehicle supplied by your employer?
An employer-provided vehicle is a vehicle owned by the company that is given to you for business travel.
In this case you also have to keep a logbook to support your claim for related expenses, but you do not need to submit the log book with your ITR12 return.
This logbook must be maintained and retained with other relevant material for a period of five years from the due date of submission to prove your claim.
Private use of an employer-provided company-owned vehicle is a taxable fringe benefit.[tip title=”Did you know?”]You must keep your logbook for a period of at least 5 years as you may be required to submit it to SARS to back up your claim.[/tip]