A client has travel allowance 3701 uses own vehicle (just bought a new one) but logbook shows no business travel. Can she claim insurance on vehicle. She also has a company fuel card.
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
The allowance can only be reduced by “any portion of any allowance or advance actually expended by that recipient on travelling on business”. If there was no business travel, there can be no reduction and the full allowance is included in taxable income.
The current practice prevailing with regard to the petrol card is as follows:
“Employees who are provided with employer-owned petrol or garage cards are regarded as having borne the full cost of fuel if the full amount expended on that card during the year of assessment is included in their travel allowance and is taxed as remuneration in the manner set out in 5.1.”
5.1 refers to paragraph 5.1 in the Interpretation note.