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Travel allowances 101: Here's why you must educate your employees about keeping an accurate logbook

by , 10 July 2014
If you give your employees a travel allowance, you must insist they keep an accurate logbook.

In addition to this, you must educate them on the importance of keeping an accurate logbook.

Read on to find out why this is important so you can ensure your employees avoid SARS penalties.

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Why your employees must keep an accurate logbook when it comes to travel allowances

Without an accurate logbook to substantiate business travel, your employees will simply become an easy target for SARS penalties, says the Practical Tax Loose Leaf Service.

You must teach them about SARS' requirements so they get it right.

Explain to them that when SARS assesses them, it merges the amounts against codes 3702 (reimbursement of travel expenses) and 3701 (travel allowance.)

It then asks your employee to substantiate business travel. If your employee doesn't have a logbook, he won't be able to do this. Their full travel allowance will be included into their taxable income and taxed accordingly! This means your employee will end up having to fork over a lot of tax on assessment.

We recommend you tell your employee to keep an accurate logbook that contains these details so he can avoid penalties.

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If you don't know the answers to questions like:

- How often your employees should hand in their logbooks?
- If you're required to pay Vat on a company car your employee wants to buy?
- How to calculate travel allowances correctly to avoid being head hunted by SARS?
- If you can claim input tax on a vehicle you use for company purposes?

You're not only wasting unnecessary hours of time, but could also be making mistakes that SARS will hunt you down for.

Be on the safe side and get 69 solutions to the most challenging company car and travel allowance questions.

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Here are the nine details your employee must include in his logbook

  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.

There you have it: Educate your employees about keeping an accurate logbook so they can avoid SARS penalties. We're certain they'll thank you for having their best interests at heart.



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