Page 243 - SAIT Compendium 2016 Volume2

IN 14 (3) Income Tax acT: InTeRPReTaTIon noTes
The xed cost amount must be divided by the total distance travelled (both private and
business):
R52 594 / 31 086 km × 100/1
Add: Fuel cost per kilometre
Add: Maintenance cost per kilometre
Total cost per kilometre
14 115 business kilometres x 282,9c × 1/100
IN 14 (3)
282,9c
R39 931
169,1c 81,5c 32,3c
The travel deduction of R39 931 is limited to the travelling allowance received, being R36 000. The excess of R3 931 is disregarded. Rnil is included in taxable income.
Example 11 – Reimbursive travel claim where no record of actual expenses was kept
Facts:
BA used his private car in December 2012 when he went on a road show to promote one of his employer’s new products. Before the start of the road show his employer agreed to reimburse him at a rate of R4,25 per kilometre. He kept a logbook so that he could calculate the total kilometres travelled but did not keep other supporting documentation for the expenses he incurred. The road show was the only time he used his private car to travel for work purposes. BA travelled 3 538 kilometres during the road show.
Result:
BA could use the cost scale table or the speci ed rate to determine the amount of the deduction he will be entitled to deduct from the allowance received. He has elected to use the speci ed rate.
The business portion of the expenses incurred in travelling on business will accordingly be determined as follows:
R Kilometres travelled
Speci ed rate per the Gazette
Total amount of deemed expenditure (3 538 km × R3,16) Reimbursive travel claim received (3 538 km × R4,25)
Amount included in taxable income (R15 036,50 – R11 180,08)
3 538 R3,16
11 180,08 15 036,50 3 856,42
Example 12 – Travelling deduction where no record of actual expenses was kept and the employee receives a travel allowance and a reimbursive travel claim
Facts:
J received a travel allowance of R36 000 for the year of assessment ending 28 February 2013. His employer also reimburses him at a rate of R4,25 per kilometre. His opening odometer reading on 1 March 2012 was 17 005 kilometres and his closing odometer reading on 28 February 2013 was 48 091 kilometres. He kept an accurate logbook detailing all of his business trips, 8 200 kilometres were travelled for business purposes. No records of actual costs relating to his motor vehicle were kept. The value of his motor vehicle is R180 000 and he wishes to claim a travel deduction for the 2013 year of assessment.
Result:
The business portion of the expenses incurred in travelling on business will be determined as follows:
Travel allowance received Reimbursive claim (8 200 km × R4,25) Total
Opening kilometres: (01/03/2012) Closing kilometres: (28/02/2013)
Total kilometres travelled
R
17 005 48 091 31 086
36 000 34 850 70 850
The xed cost for the vehicle amounting to R180 000 is R52 594.
The xed cost amount must be divided by the total distance travelled (both private and business).
R52 594 / 31 086 km × 100 / 1
Add Fuel cost per kilometre
Add Maintenance cost per kilometre
Total cost per kilometre
8 200 business kilometres × 282,9c × 1 / 100
Amount included in taxable income (R70 850,00 – R23 197,80)
169,1c 81,5c 32,3c
282,9c
23 197,80
47 652,20
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