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Travel allowance basics: Is it compulsory or optional for employees to keep a logbook?

by , 09 September 2014
Our tax experts get a lot of questions regarding travel allowances.

One question they got this week comes from an employer who wants to know whether keeping an accurate logbook is compulsory or just optional for employees.

If you want to know the answer as well, here's what you need to know so your employees can comply.

Travel allowance basics: It's compulsory for employees to keep an accurate logbook

It's compulsory for your employees to keep a logbook to record what travel was for business and what travel was for private purposes.

If your employees don't keep an accurate logbook, they can't claim a tax deduction. And they could end up having to fork over a lot of tax on assessment.

But it's not only your employees who will suffer.

According to the Practical Tax Loose Leaf Service, if you structure a travel allowance or reimburse employees for travel, but don't ask them for the logbooks to prove their travel, you're exposing your business to a high risk of penalties and interest.

To avoid the wrath of SARS, educate your employees about the importance of logbooks. Make it clear to them that keeping a logbook is compulsory and they must update their logbooks daily and include these details…

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Here are the nine details your employees must include in their logbooks

  1. Date of travelling;
  2. Opening kilometres;
  3. Closing kilometres;
  4. Total kilometres;
  5. Private kilometres;
  6. Business kilometres;
  7. Business travel details (where, reason for visit, etc.);
  8. Actual fuel cost and oil cost; and
  9. Actual repairs and maintenance cost.
Here's the bottom line: Keeping an accurate logbook isn't optional, it's compulsory when it comes to travel allowances. So make sure your employees have accurate logbooks to substantiate their travel claims.

PS. Find out how to save R26 983 by keeping an accurate logbook

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