My client receives a travel allowance - I want to calculate the best option for her to claim a deduction so there's the deemed cost method vs actual cost method. She uses her private car for business and has kept a detailed logbook. Can she claim her insu
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
The relevant law is found in section 8(1)(b)(ii) and in issue 4 of the practice generally prevailing.
Section 8(1)(b)(ii) requires of the recipient of the allowance to furnish “an acceptable calculation based on accurate data”. In terms of the practice generally prevailing, “recipients will need to perform an acceptable calculation based on accurate data. An acceptable “expenditure per kilometre” calculation will contain two elements, namely, total kilometres travelled and the total expenditure incurred by the recipient.” The expenditure will be “expenditure in respect of any motor vehicle used by the recipient”.
In terms of the practice generally prevailing, “Examples of the type of expenditure which may be included are wear-and-tear or lease payments, fuel, oil, repairs and maintenance, car licence, insurance and finance charges.”