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Five ways to get your business travel costs back

by , 09 February 2017
As you know, travel is an integral part of business. But the costs associated with travel are high. There's the cost of flights, car rental, accommodation and meals. This is sometimes just the start of the costs.

But what if I told you there was a way for you to get some of these costs back?

Keep reading to find out what the five common business travel expenses are and their VAT consequences...

Can you really afford not to be 100% sure about every input tax claim you submit?

Most VAT vendors make one of two big mistakes when claiming their input tax.

They either:
  1. Don't know about certain input tax deductions which SARS allows, and then lose out on important cash flow savings for the business; or
     
  2. Claim when they shouldn't and face SARS penalties and assessments!
Don't make the same mistake. Here's how you can be 100% sure about all your input tax claims


Five common business travel expenses you can claim the VAT back on

1. Air travel – you can only claim on domestic air tickets

Domestic air tickets include VAT at 14%, so you can claim this as an input.

You can claim the input tax on the ticket service, passenger service charge and the fuel surcharge.

If you use a travel agent, get an invoice from them to get the thumbs up from SARS for this input tax claim.

2. Claim back the VAT on the employee's accommodation

If the establishment your employee is staying in is VAT-registered, then they'll charge you VAT on the accommodation at 14%. You can claim back the input tax charges on the accommodation costs.

Keep reading to find out the other 3 business travel expenses you can claim the VAT back on.


There are new laws that affect all your invoices

Find out:
  • How to apply these eight requirements to make sure you have a valid invoice                                       
  • The only two ways to show the VAT amount on a tax invoice
  • How to meet these three requirements for electronic invoices or SARS won't accept them
  • How to avoid these common tax invoice errors
  • Six examples of valid invoices you can use in your company
Do all this and SARS won't deny your input tax deductions.

Five common business travel expenses you can claim the VAT back on…continued

3. Claim back the VAT on meals and refreshments (including liquor)

You can claim the input tax charged on meals and drinks for your employee. Make sure he collects and keeps all the receipts. You'll need them if SARS asks for proof of the expenses.

Don't try to claim the input tax on meals and refreshments for clients! This counts as an entertainment expense, and SARS won't let you claim these costs.

4. Rental of commercial vehicles and buses

SARS sees commercial vehicles differently to regular cars. Commercial vehicles include buses, vans and delivery vehicles, for example.

So let's say you send a group of salesmen to the Cape for a week, and you rent a bus for them to get around easily, you can claim the input tax on this rental. But you must make sure it can carry more than 16 passengers.

5. Car rental's not claimable – unless you hire a bakkie!

VAT is charged at 14% on car rental in South Africa. But you only claim this by renting a bakkie for your employee! It falls outside of the definition of a motor vehicle, so you can claim the input tax on the rental of the bakkie.

You can also claim the VAT on the insurance, damage, excess and accident administration charge.

But, there is one condition your employee must meet so you can claim the costs back. To find out what it is, click here.

For practical examples on how to claim back the costs, refer to your Practical VAT Handbook. If you don't have a copy of the Loose Leaf yet, get yours now.

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