Car allowance

[Wall]

Hey guys, I need some advice.

I recently got a Salary bump but they split the increase with a normal increase and a car allowance.

Eg. Increase in total was R200. R100 went to car allowance.

Now granted I use my car occasionally for business Purposes but its not alot. (Max 60km p/m)

So why would they give me a car allowance? Is there some form of benefit they derive from this? Why not just give me a normal increase?

Also, what are the implications of this with regards to SARS. I'm not prepared to lie to SARS about my travelling and car allowance. (Business travel, most of the allowance would constitute personal travel)


They seemed to say I could get more money back from SARS. If I claimed business usage but I hardly do business travel. They tried to sell it as an additional benefit given to me
Thanks

 

[ElementZero]

they trying to make your Nett salary look more , as you will pay less tax if you structure a car allowance. for example if you got R200 increase you maybe would pay R60 tax but if they split to R100 salary and R100 car allowance you may pay about R45 for tax.

My advice is to remove the car allowance cause sars is trying to tie up all these loop holes.

 

[RexxGrim]

Just go to your HR department and instruct them to deduct full tax from your car allowance. Then when you file you'll have no probs with SARS. You'll be paid up.

Otherwise they deduct less tax from the car allowance part, in anticipation of you claiming expenses. At 60km a month you're not going to claim anything worth while, so you'll have to pay tax in at the end of the year.

 

[guest2013-1]

If you literally rent the car you're driving and have a car allowance? would it still be beneficial to not have a car allowance or should I keep the car allowance going?

 

[Icarium]

If you literally rent the car you're driving and have a car allowance? would it still be beneficial to not have a car allowance or should I keep the car allowance going?

It would still boil down to what extent you use the car for work purposes. If you have a lot of work related travel, the car allowance is beneficial. If you use it mostly in a personal capacity it becomes an irritant when you have to do your tax return.

 

[guest2013-1]

It would still boil down to what extent you use the car for work purposes. If you have a lot of work related travel, the car allowance is beneficial. If you use it mostly in a personal capacity it becomes an irritant when you have to do your tax return.

Well I have no social life, so the only travel I do is for work

 

[RexxGrim]

Well I have no social life, so the only travel I do is for work

Remember travel between work and home is private not business.

 

[sly]

What if you work for international company and service local clients and you don't have an office, work at client sites.. what category does that fall in?

 

[DJ...]

What if you work for international company and service local clients and you don't have an office, work at client sites.. what category does that fall in?

That is business travel...

 

[Messugga]

That is business travel...

Indeed, and it's a glorious thing.

 

[rterblanche]

What if you work for international company and service local clients and you don't have an office, work at client sites.. what category does that fall in?

But you must then prove your office is at you home.

 

[sly]

But you must then prove your office is at you home.

The registered office is in cape town, so we don't have an office up here in johannesburg, i never work from home.. just odd times when i don't feel like going out

 

[Beachless]

The registered office is in cape town, so we don't have an office up here in johannesburg, i never work from home.. just odd times when i don't feel like going out

If they ask you then just say that you start every morning by going to your study to read your emails and do some work before going to a client.
But I dont have a car allowance anymore because its just so much of a pain.

 

[sly]

If they ask you then just say that you start every morning by going to your study to read your emails and do some work before going to a client.
But I dont have a car allowance anymore because its just so much of a pain.

i have the DQ track device on my car, I update the log book from the SARS website diligently every week with data, all the petrol slips for the year, keep record of anything i buy to fix up the car..

so i hope all is in order, i'm filing the first day they open and see what happens