Are using a car a must to be employed and how does it exactly work?

[hexten]

Hi everyone.

Im trying to find some answers to a technical question here being that: is it an requirement for you to have a car for work and it be used for business purposes by your employer?

My whole trend of thinking is, the employee have to take his car to work and pay the maximum amount of fuel since its a car and you drive it from home to work and back.

The employee cannot take a bike a public transport to work because the employer said that the employee needs to make his car available for work.

Could the employee ask for a fuel allowance because of the fact that his car needs to be made available for business purposes?

Lastly the insurance goes up because the car is used for business purposes, could you ask the employer to cover some of that cost?

The employee is paid per KM but only for business trips

 

[ArtyLoop]

It are called a travel allowance.

 

[krycor]

depends on frequency wrt insurance, they have a set number of days/month and/or km/month that distinguish this pending insurance provider.

The cost/km should typically cover basic insurance, maintenance and fuel though this is set each financial year by SARS so likely you make a loss on a weakening currency trend / fuel increase cycle, or have a fuel/tyre eater of a car.

 

[Toxxyc]

I used to be "forced" to use my car for work. I was paid by the km, postpaid, which I had to claim per travel. Company paid WAY under the AA tariff (something like R2,20 where the AA tariff back then was around R4,50 for the car I drove) and they refused any and all other expenses. So I had to pay for the new clutch when it got worn out towing an overweight trailer for 180km per day, etc.

I then sold my car and said "sorry, I'm not buying a work car again", and they were pissed. Even went as far as to say I'm not allowed to sell my car because the company needs it. So I said they can buy it, and that was the end of it. It's a **** situation, and I won't go into it ever, ever again.

 

[hexten]

I used to be "forced" to use my car for work. I was paid by the km, postpaid, which I had to claim per travel. Company paid WAY under the AA tariff (something like R2,20 where the AA tariff back then was around R4,50 for the car I drove) and they refused any and all other expenses. So I had to pay for the new clutch when it got worn out towing an overweight trailer for 180km per day, etc.

I then sold my car and said "sorry, I'm not buying a work car again", and they were pissed. Even went as far as to say I'm not allowed to sell my car because the company needs it. So I said they can buy it, and that was the end of it. It's a **** situation, and I won't go into it ever, ever again.

The employer does seem to be willing to pay half of maintenance. So that is nice, but your situation sounds like a bad case scenario

 

[GhostSixFour]

The employer does seem to be willing to pay half of maintenance. So that is nice, but your situation sounds like a bad case scenario

Yeah. Get that in writing. And also, keep methodical track of any and all kilometers travelled for business to submit when tax time rolls around.

I'm not sure if a company can force you after the fact though - if it was part of the agreement when you started, then sure I suppose. If my company told me to sell my bike and get a car cause they need it, I'd resign. If they want a car, they can buy it.

 

[hexten]

depends on frequency wrt insurance, they have a set number of days/month and/or km/month that distinguish this pending insurance provider.

The cost/km should typically cover basic insurance, maintenance and fuel though this is set each financial year by SARS so likely you make a loss on a weakening currency trend / fuel increase cycle, or have a fuel/tyre eater of a car.

Could one then maybe ask Sars how exactly does it work?

 

[ArtyLoop]

I used to be "forced" to use my car for work. I was paid by the km, postpaid, which I had to claim per travel. Company paid WAY under the AA tariff (something like R2,20 where the AA tariff back then was around R4,50 for the car I drove) and they refused any and all other expenses. So I had to pay for the new clutch when it got worn out towing an overweight trailer for 180km per day, etc.

I then sold my car and said "sorry, I'm not buying a work car again", and they were pissed. Even went as far as to say I'm not allowed to sell my car because the company needs it. So I said they can buy it, and that was the end of it. It's a **** situation, and I won't go into it ever, ever again.

The joys of working for arseholes yes..

 

[Urist]

If they re-imburse you more than R3.60 you should keep a logbook, otherwise SARS will think it`s extra income and nail you. Used to be if you travel more than 12000, now they made it a fixed amount per km, everything under is re-imbursive and everything over is allowance they tax you on when you do your return.

 

[krycor]

Could one then maybe ask Sars how exactly does it work?

It’s defined.. between what’s considered taxable benefit and what’s not. Pretty much like per diems. It’s a guideline vs tax though(so hasn’t changed lately due to fiscal issues) again.. sucky car = more likely to cost a lot vs maintenance and then lots of km = insurance costs go up.

The point though is that businesses need to buy a car when it gets excessive as it’s more tax efficient. The tax laws were written this way because of the rampant abuse in the early and mid 2000s.

Just remember.. if you company pays anything over and above the km traveled from work, eg, directly paying insurance or maintenance.. this technically should get added to your annual salary and you get taxed accordingly as it’s an income benefit. This is why exceeding the per km rate = not worth it and as such a company vehicle works out better longer term.

 

[krycor]

Ps. Wonder how this works with delivery drivers who use their own cars (not that they declare for tax)