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When it comes to company cars and travel allowances, ownership is key

by , 04 July 2014
When it comes to company cars and travel allowances, there's a lot of debate and confusion. Our experts on the Accounting and Tax Club can bare testament to that. They often have to explain the difference to confused business owners.

But in truth, the things that separate these two are fairly straight forward. Once you understand them, it's a matter of choosing the one that suits your business.

To help you get to that decision, we're revealing how ownership plays a huge role when it comes to company cars and travel allowances...

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Get 69 solutions to the most challenging company car and travel allowance questions
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.

The key to choosing 'company car' or 'travel allowance' is who owns the car

If your employees travel a lot for business, you need to find some way to help with the cost. After all, it's not right to make your employees pay for the travelling they do for your business.
But when it comes time for you to choose how to do this, you have two options: One means you have and manage an extra asset, the other means you just pay your employees back. 
The line between these two comes down to who owns the car...
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12 Taxable fringe benefits - are you taking advantage of all of them?
There are hundreds of companies out there that don't know which fringe benefits are taxable or they land up taxing the wrong percentage on them...
This kind of error could cost you thousands in penalties to SARS if it catches you out – and it will!

Ownership determines if it's a company car or a travel allowance

This also means your business will normally cover the cost of the insurance, maintenance and fuel.
With a travel allowance, your employee uses his own car. Whenever he travels, he'll pay for the expenses out of his travel allowance and you'll reimburse him for this
Really is that the biggest difference between a company car and a travel allowance. Now it's up to you to decide which one suits your company. 

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When it comes to company cars and travel allowances, ownership is key
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