Most South Africans’ budgets are getting tighter by the minute with rising travel costs, including fuel prices, fuel levies, e-tolls and the possible implementation of carbon taxes, receiving a SARS refund of these expenses is always welcome!
SARS Refund Rumours
Contrary to many rumours, such a welcome refund is possible. If of course you can provide SARS with a complete and detailed logbook. You must record their vehicles’ opening odometer reading for the new tax year on 1 March annually. I must contain detailed logs of every trip during the year.
Ideally you should have an electronic log book in your car, with which, you can easily and effortlessly track, measure and monitor your vehicle mileage, fuel consumption, vehicle maintenance and e-tolls. If you do not have one of these devices, you can still claim. To ensure that you don’t miss out on your next tax refund, read the information below before submitting your next travel claim.
When can you claim for travel?
If you receive a travel allowance from an employer or principal, you can claim a deduction for the use of your private vehicle for business purposes. Alternatively, if you do not receive an allowance but use your car for business, you can claim.
Top Tip: you must keep your logbook for a period of at least five years as you may be required to submit it to SARS to back up your claim.
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 i.e. 1 March 2016 – 28 February 2017). 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:
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the date of travel
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where you started your trip and where you ended your trip
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the kilometres travelled
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categorise your trips as business or private
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the reason for the trip
In addition to keeping a logbook, you can also choose 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. You may be required to submit it to SARS to back up your claim. There is also a table of costs linked to the value of your vehicle supplied by SARS each year. Read more here.
Top Tip: Your travel between home and your place of work cannot be claimed for business purposes, as this is regarded as private travel. A separate logbook must be kept for each vehicle used for business travel.
How do I calculate how much I can claim?
You travel expenses claim is part of your tax return. Calculate your claim using the calculator on the SARS website, based on the SARS cost table for that tax period. This calculation will provide you with an approximate claim amount.
You may not get all the expenses back. This is because of various factors included in the tax return and the tax legislation. It is best to ask an accountant or a tax specialist for a more accurate estimate.