Commissioner earner 3606 on IRP, what kind of expenses is he allowed to claim?
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
We accept that the fact that you state the individual is a “commission earner” and the reference to code 3606 confirm that section 23(m) of the Income Tax Act doesn’t apply – essentially that the individual carries on a trade independently and derived income (by way of commission) therefrom. But it was subject to employees’ tax.
The individual would then not be limited and would be able to make the deductions available in terms of the legislation. Of course, if there is a private use, the necessary apportionment would be required. The relevant deductions would, for example, be made under section 11(a), 11(d) and / or 11(e). It would of course depend on the nature of the expense.
With regard to business travel, the deduction must be based on the actual cost, which would include expenditure on fuel, insurance, finance, maintenance and wear and tear (in other words, under section 11(a), 11(e), 11(d) and 24J where applicable). The total must then be adjusted for private use (based on the logbook) – section 23(a) or (g).