Tax on Fuel Allowance

[kemosabe]

Hi,

Apologies if this is a repost of a topic I have seen discussed in other posts on these boards ... but by way of explanation, I need 100% confirmation of the information I've picked up.

I need to make a recommendation to my employer which will affect a significant number of people, so I need to be certain of what I propose.

If my employer makes a monthly payment of R 1,000 into a dedicated debit card ( such as PetroCard / GarageCard ) that may only be used for:

• Fuel
• Tyres / Shocks / Exhausts / Batteries
• Toll Fees

Am I correct in assuming that the salary slip of each employee should reflect:
R 1,000 benefit w.r.t. Fuel Allowance / Vehicle Expenses
and
a deduction of benefit tax applied against @ 80% of the benefit
= amount of benefit liable for tax is R 800 ( at the employee's applicable tax rate )

Are there other criteria or conditions attached to this ?

Does the employee need to use their car for business purposes

• Does the employer need to prove this in any way ?
• Does the employee need to prove this in any way ?

I have browsed through and read this page:
http://www.sars.gov.za/home.asp?pid=3784#travel allowance

I'd appreciate any confident advice anyone can give me in the accurate interpretation of this information.

Cheers
Rich

 

[encrypted]

You do not get taxed on 20% of your "Travel Allowance".

At the end of the tax year you now need to justify everything.

Kilometres with a log book, repairs/maintenance with receipts.

After justifying the tax allowance you:

a) Get more refund for the whatever portion of the 80% that you were taxed on can be deducted.
b) Pay in for not being able to justify it all.


Do not lie about what is on your car's odometer. All deductions are based on Kilometres Travelled vs Value of car/upkeep/petrol etc.

Driving to work and back is not work kilometres.

I am no tax expert but I have to justify this every year so that's my experience.

Salary slip will reflect "Travel Allowance"

 

[kemosabe]

After justifying the tax allowance you:

a) Get more refund for the whatever portion of the 80% that you were taxed on can be deducted.
b) Pay in for not being able to justify it all.

Thanks ... this is exactly what I am trying to "drill down" into.

Am I correct in assuming that effectively:

* the Tax on 80% is a "monthly estimate deduction" during the course of the year
* and once the log-book is submitted with the Tax Return, then according to the "actual real-world business travel figures"

either more than 20% can be claimed as non-taxable ( or a rebate is paid )
or less than 20% can be claimed as non-taxable ( or additional tax is deducted )

Cheers