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THE South African Revenue Service (Sars) is to clamp down on taxpayers who fail to accurately and honestly reflect details relating to the travel section on their tax return forms.
Sars spokesperson, Sechaba Nkosi, says some taxpayers have been dishonest in the past when furnishing travel specific information.
Nkosi says Sars is giving taxpayers a chance to voluntarily comply in this regard as this could lead to penalties if the suggested SARS guidelines not be followed.
"Taxpayers who fail to record an opening and closing odometer reading on their tax returns will not be considered for deductions on travelling expenses," says Nkosi.
Nkosi says taxpayers should not be dishonest about the kilometres they have travelled during the last tax year, because Sars can easily verify this information.
For example, Sars could request a copy of the invoice from one's last car service and together with a physical inspection of the kilometres of the vehicle in use determine the reasonability of the kilometres claimed.
Individuals will be randomly selected for examinations and inspections.
Sars will also be scrutinising travel allowances this year.
"If the value of a travelling allowance is significantly greater than the number of kilometres the individual travels for business purposes, he/she will have to pay back taxes to SARS when the individual tax assessment is made," Nkosi says.
The distance travelled between home and work is regarded as private travel and SARS recommends that taxpayers keep a logbook to ensure accurate calculations.
"However, if accurate records of travelled kilometres are not kept, claims will be limited in accordance with the guidelines specified in your brochure."
If a taxpayer did not keep a logbook, there will be limitations to a claim. If more than 32 000 kilometres was travelled during the tax year, the first 18 000 km will be deemed business travel and the difference private travel.
If less than 32 000 kilometres was travelled during the tax year, the first 14 000 kilometres will be deemed private and the difference business travel.
If no records were kept, sections 1, 2 and 3 of the travel section in the tax return must be completed.
If accurate records of travelling expenses were kept, only sections 1, 2 and 4 of the travel section must be completed to calculate claims.
"In terms of running expenses, if you don't use the tax tables to claim these, you must also keep all receipts for petrol, repairs and servicing if you wish to base your deduction on actual costs," Nkosi says.
These receipts do not have to be submitted with the tax return, but must be made available upon request. The logbook however, book must be submitted.
"A travel allowance provides a cash flow advantage, because monthly PAYE tax is only calculated on 50% of your monthly allowance," he says.
"However, this can work against you if travelling is not part of your everyday work or your kilometres travelled do not add up toyour allowance received," Nkosi points out.
"In such a case the outstanding tax will be collected from you when you submit your tax return."
For example, if a total distance of less than 14 000 kilometres is travelled during the tax year and a logbook is not kept, a taxpayer will not be able to claim against their travelling allowance and will be taxed on the full amount.
"The travelling allowance is intended to compensate taxpayers for the use of their own vehicles for business purposes. It is not intended to increase a taxpayer's cash flow, which is how many employers often view it," Nkosi says.
For additional information on travel claims, taxpayers can contact their local SARS branch office, visit their local SARS outreach initiative, or go to the SARS website at www.sars.gov.za. |