With the 2021 tax year drawing to a close on 28 February 2021, it is time to ensure that you start the next tax year on the right foot. One of the most commonly overlooked tax necessities is the vehicle logbook.
If you receive a travel allowance from your employer when you travel for work then you are allowed to claim back a tax deduction on your income tax. The allowance should be on your payslip and on your IRP5 at the end of each year (IRP5 code 3701/3702). You will need to fill in the opening and closing odometer readings, as well as the actual kilometres travelled in order to claim the deduction on your tax return. This is why it is important to keep an accurate logbook throughout the year. SARS may also request your logbook as part of their verification or audit documents.
These days there are various options for keeping logbook records. Stationary shops stock physical books in the correct format for you to fill in manually. You may keep electronic records such as a spreadsheet on Microsoft Excel. There are even GPS trip loggers which you connect to your vehicle and which export your data electronically when needed.
You should also keep a logbook if you have a company car. The calculations for the tax deduction may be different, but you will still need your logbook to substantiate the kilometres used.
With the wide range of options available it is easier than ever to keep accurate record of your business travels. Should you need assistance with your Income Tax returns, feel free to contact us for an appointment.
