The South African Revenue Service (Sars) is set to clamp down on taxpayers who fail to reflect accurately and honestly details relating to the travel section on their tax return forms, the receiver said in a statement on Monday.
Sars spokesperson Sechaba Nkosi said some taxpayers have been dishonest when furnishing travel-specific information. He said the receiver is giving taxpayers a chance to comply voluntarily in order to avoid penalties.
“Taxpayers who fail to record an opening and closing odometer reading on their tax returns will not be considered for deductions on travelling expenses,” Nkosi said.
He said taxpayers should be honest about the kilometres they have travelled during the past tax year, because the receiver can easily verify that information.
He cited an example whereby Sars can request a copy of the invoice from one’s last car service, together with a physical inspection of the kilometres of that vehicle to 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 or she will have to pay back taxes to Sars when the individual tax assessment is made,” Nkosi continued.
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,” he said adding that if a taxpayer does not keep a logbook, there will be limitations to a claim.
“If more than 32 000km was travelled during the tax year, the first 18 000km will be deemed business travel and the difference private travel. If less than 32 000km was travelled during the tax year, the first 14 000km will be deemed private and the difference business travel,” the Sars statement said.
“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 noted.
He said these receipts do not have to be submitted with the tax return, but must be made available upon request, adding that the logbook, however, must be submitted.
“A travel allowance provides a cash flow advantage, because monthly PAYE [pay as you earn] tax is only calculated on 50% of your monthly allowance.
“However, this can work against you if travelling is not part of your everyday work or your kilometres travelled do not add up to your allowance received … in such a case the outstanding tax will be collected from you when you submit your tax return,” Nkosi explained.
“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.”
The receiver urged taxpayers to contact its branch offices for more information. — I-Net Bridge