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Here's why John must have a logbook if he uses the company car

by , 30 September 2014
When you work out your employee's fringe benefit tax on his use of the company, how do you do it? Do you just guess how much private travel he did in the car? Or worse, do you assume he just used it for business travel only?

Either of these guessing tactics could lead to major errors in your employee's tax and that could get SARS' attention in a bad way.

This is where an accurate logbook comes in.

Here's why it's so important for your employee to keep this document...

 

John must keep a logbook for his company car use. Here's why

 
John only pays fringe benefit tax on his private use of the company car. He needs to keep a logbook so you can see exactly how many of his travel kilometres were for private purposes.
 
His logbook can help him reduce his fringe benefit tax up to 60% because it can prove his usage of the car is 80% business. 
 
But this isn't the only reason his logbook is so important.
 
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Here's the other reason your employee needs a logbook

 
John's logbook also becomes a vital supporting document. If SARS wants to audit your company and check if you calculate your employees' fringe benefit tax correctly, it will want to see John's (and you're your other employees') logbooks.
 
The logbook will show you correctly taxed your employee's private use of the car and didn't short change SARS.
 
Without this logbook, you and John are vulnerable to SARS penalties because you can't substantiate the information on your tax returns. 
 
As you can see, your employee's logbook is of vital importance when it comes to staying on the right side of SARS. Ensure he keeps one and that it's always accurate. 


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