A vital part of managing your employees travel allowance is his logbook. This must accurately detail his travel expenses.
If his logbook isn't 100% accurate and up-to-date it could land him, and you, with SARS penalties.
This isn't something your company should have to deal with. That's why today we're revealing three things your employee needs to know about keeping an accurate logbook...
The only three checklists you'll ever need when it comes to company cars
Sometimes large amounts of information can be overwhelming especially when all you're trying to do is have all the relevant information you're looking for, summarised and in one easy-to-find place. I have just the answer for you...
We've compiled three handy checklists on the details that MUST be included in your logbook, the three most common travel allowance errors you must avoid to escape penalties and all the differences between a company car and a travel allowance. You can print these out and keep them on your desk so you don't have to wade through pages of information.
While going through your checklists you might have a question about company cars or travel allowances. So what now? Do you go back to the internet to search for the answers? Or call you tax consultant and spend R1 200 to get your answer?
No. You don't have to do either of these. We've answered 10 of the most popular company car and travel allowance questions. Here they are.
Here's what your employee needs to know about keeping an accurate logbook
#1: SARS is more interested in how much private travel your employee does
It doesn't help if your employee just records the kilometres he travelled because this could still land him with penalties. SARS wants to know how much private travel he did on the company's money. This travel becomes a fringe benefit that he'll have to pay tax on. That's why he must carefully detail his private travel.
#2: Your employee mustn't just record mileage and fuel costs
If your employee just records his mileage and fuel costs, his logbook is inaccurate because it doesn't show the breakdown between private and business travel.
While he must include his mileage and fuel costs, he also needs to show how much of that mileage was business and how much was private.
Keep reading for the last thing your employee needs to know about keeping an accurate logbook...
How to make yourself invisible to SARS
The key to reducing how much tax you pay is staying off SARS' radar.
SARS has conducted R1.8 million audits. They've added 100s of new tax collectors and auditors to their payroll and each one has his own collection targets to meet. This means two things:
1.If you're not compliant, your chances of an audit this year have just doubled, and
2.You will pay more in penalties.
But there are 139 perfectly legal ways for you to make yourself invisible to SARS. Here's how…
What your employee needs to know about keeping an accurate logbook...
#3: Your employee must include all the relevant details of his business travel
Your employee must clearly indicate when he started travelling and when he finished. If he travels for work every day, he must show the date and time when he starts and ends his work.
It must also have:
• Opening kilometres;
• Closing kilometres;
• Total kilometres;
• Business travel details (where, reason for visit, etc.);
• Actual repairs and maintenance cost.
If your employee remembers all of these things when he completes his logbook it'll be accurate every time. And did you know that with an accurate logbook you could save R26 938? Click here as I explain how exactly you can save R26 983 with an accurate logbook.
Until next time,
David van Niekerk,
Editor in Chief: The Practical Tax Handbook
P.S. If you're confused about car and travel allowances, get expert answers to the most frequently asked company car and travel allowance questions when you get your risk-free copy of the Practical Tax Handbook. Get yours now