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If you only do one thing today: Make sure you record the odometer readings of your company's cars

by , 28 February 2014
Today is SARS's financial year end for companies. This means it's the day you need to submit your odometer reading if you give your employees a travel allowance to cover his business travel costs when he uses his own car or if he drives a company car. Here's what to do...

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The company car. An employee's favourite perk. An accountant's little time bomb.
 
Spending time trying to calculate all the variables of company cars vs. travel allowances can be frustrating not to mention complicated. 
Well, you don't have to pull your hair out anymore.

Here are 14 practical examples to make your travel calculations in minutes.
 

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Make sure you get your employees' odometer reading


The Income Tax Act (ITA) is on your side when it comes to company cars. In terms of the Act, taxpayers who get a travel allowance can claim for travel expenses if they use their private cars for business purposes.

While the ITA might be on your side, time isn't.

If your employees have been updating their logbook throughout 2013, today's the day you must record your vehicle's closing odometer as it's the last day of the tax year.

This is important because without an opening and closing odometer reading, your travel claim won't be considered, warns SARS.

If you kept an accurate logbook for 2013 by recording the date, kilometres travelled and the details of the trip, things will be easy for you when you submit your employees' ITR12 return.

So how do you work out the amount to claim?

SARS says there are two ways of doing this:
 

  • Calculate your claim based on the cost scale table which SARS supplies (you'll find this table in the introduction section to the travel eLogbook.
  • Calculate your claim based on the actual costs. To do this, you'll have to keep an accurate record of all your expenses during the year, in addition to keeping a log book. These expenses include fuel, oil, repairs and maintenance, car licence, insurance, wear-and-tear and finance charges or lease costs.


Important: Now that you know what to do regarding your last odometer reading, don't forget that the first day of the tax year starts on the 1st of March. So make sure you keep an accurate logbook by recording your cars' first odometer reading for the year.

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