Claim­ing tax on cars

The Witness - Wheels - - MOTORING - — imo­toon­line.co.za

It’s that time of the year where many in Mzansi are sub­mit­ting their per­sonal tax re­turns (IRP5), we note key points we have learned so far on what im­pact this has on car own­ers.

By car own­ers we are re­fer­ring to peo­ple who ei­ther have com­pany cars or get car al­lowances or use their own per­sonal cars for oc­ca­sional busi­ness/work.

1. Car Al­lowance Best put, this is the scheme where you get a monthly al­lowance (in­come source) for busi­ness use of a reg­is­tered mo­tor ve­hi­cle. Let me clar­ify this in an eas­ier way, peo­ple who have been given a car al­lowance by their em­ploy­ers, get this fi­nan­cial ben­e­fit in ad­vance.

The car al­lowance forms part of your to­tal em­ploy­ment pack­age. At the time of com­plet­ing and sub­mit­ting your IRP5 doc­u­ments, we have learned that you might have to con­sider the fol­low­ing key points: Un­der the code 3701 on your IRP5 form sub­mis­sion, you then put the nec­es­sary in­for­ma­tion re­gards your travel in that fi­nan­cial year. The fi­nan­cial year of tax sub­mis­sions (tax pe­riod) goes from travel done be­tween March 1 of a year to the fol­low­ing year’s Fe­bru­ary 28.

For this year’s sub­mis­sion, you are look­ing at March 1, 2017 to Fe­bru­ary 28, 2018. All per­sonal and busi­ness travel done dur­ing this pe­riod is used for your sub­mis­sion.

2. Log book: This is the sin­gle most im­por­tant doc­u­ment needed for fil­ing when you have a car al­lowance. This should not be con­fused with a log­book that proves own­er­ship but this is more a book where you “log” your daily busi­ness trips or even per­sonal trips when us­ing a car pur­chased un­der a car al­lowance scheme. When com­plet­ing your log book for the tax year, you will need to take note of the fol­low­ing:

Mileage: This is the dis­tance in kilo­me­tres you travel in your ve­hi­cle in that par­tic­u­lar pe­riod

Work / busi­ness trips: You com­plete this sec­tion DAILY when do­ing busi­ness trips in your car. These are trips are di­rectly re­lated to your work. Trav­el­ing from home to your work ad­dress is not a busi­ness trip. When you travel from one des­ti­na­tion to an­other for con­duct of­fi­cial work, this is then re­garded as a work/busi­ness trip.

Day to day: Each trip on each day will need to logged on your log­book in­de­pen­dently and most im­por­tantly, you will need to put a busi­ness rea­son for EACH trip just in case SARS de­cides to con­duct an au­dit on your IRP5 sub­mis­sion.

Clos­ing sec­tion: Your log­book will have an open­ing sec­tion and a clos­ing sec­tion. The open­ing sec­tion is where you put the ex­act mileage at the start of your busi­ness trip (at point of de­par­ture). The clos­ing sec­tion is where you put the ex­act mileage at the end of that par­tic­u­lar busi­ness trip you have com­pleted (point of ar­rival). To­gether with the rea­son for the busi­ness trip, this al­lows SARS to con­firm the mileage and rea­sons for your busi­ness trip on your tax sub­mis­sion.

3. Pur­chase agree­ment: You will need to also sub­mit a pur­chase agree­ment doc­u­ment as part of your tax sub­mis­sion to prove to SARS you ac­tu­ally own the ve­hi­cle you are sub­mit­ting a claim on. It will have de­tails of the ve­hi­cle i.e. (1) Reg­is­tra­tion num­ber – e.g. 11BB22 GP (2) Price of pur­chase (3) Model year of first li­cens­ing reg­is­tra­tion – 2014 model (4) The make of the ve­hi­cle – VW Polo

4. Dou­ble sub­mis­sion You do get in­stances where a per­son has a car al­lowance and has also made a fi­nan­cial claim to the em­ployer for busi­ness/work trips. At the time of com­plet­ing and sub­mit­ting your IRP5 doc­u­ments, we have learned that you might have to con­sider the fol­low­ing key points:

You will use both code 3701 and 3702 on your IRP5 form sub­mis­sion, you then put the nec­es­sary in­for­ma­tion as re­gards your travel in that fi­nan­cial year. The in­for­ma­tion/points stated above in each of the cat­e­gories ex­plained still needs your com­pli­ance in full.

It’s im­por­tant to con­tact your near­est SARS of­fice should you feel you are in­ad­e­quately ca­pac­i­tated to com­plete this sec­tion of your IRP5 tax sub­mis­sion.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.