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It's a SARS requirement: But do you know why employees must keep an accurate logbook?

by , 22 August 2013
If you give your employee a travel allowance to cover his business travel costs when he uses his own car, it's crucial he keeps an accurate log book. Here's why...

It's important that you get the treatment of travel allowances right. The best way to do this is to ensure your employees keep an accurate log book.

Here's why you must ensure your employee's logbook is in order

Without an accurate logbook to substantiate business travel, your employees will simply become an easy target for SARS penalties. Educate them about the SARS requirements so your employees get it right, says the Practical Tax Loose Leaf Service.

Explain to your employees that when SARS assesses them, it merges these amounts against codes 3702 (reimbursement of travel expenses) and 3701 (travel allowance) on their IRP5. And it asks the employee to substantiate business travel. Without a logbook, your employees won't be able to do this.

Here's a checklist of nine basic details your employees must include in their logbook and update daily:

  • Date of travelling
  • Opening kilometres
  • Closing kilometres
  • Total kilometres
  • Private kilometres
  • Business kilometres
  • Business travel details (where and reason for visit)
  • Actual fuel cost and oil cost
  • Actual repairs and maintenance cost.

Remember, a fabricated logbook is worse than no logbook at all!

If your employee fabricates his logbook and SARS picks it up, he'll be found guilty of fraud. He could be liable for criminal prosecution and penalties and interest from SARS for issuing a revised assessment.

So make sure your employee keeps related documents such as service records, dates of holiday leave, places entertained and fuel stops. He can use these to validate logbook information if SARS queries any item.

Now that you know the importance of an accurate logbook, make sure your employee keeps one he can substantiate his business travel.

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