SARS is insisting on applying code 4015 with attendant requirements whereas my client is fighting SARS on the basis of code 4016. Taxpayer is a lOO % commission earner only (various IRP 5 - lncome source code 3606) 2. SARS's is, inter alia, requesting a "
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
We agree with your view that the deduction in this instance 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). It appears from the information that the taxpayer is not in receipt of an allowance and that no reduction can therefore be made in terms of section 8(1) of the Income Tax Act.
According to SARS (in their logbook guide) “it is now compulsory to keep a logbook of all your travel in which you record what travel was for business and what travel was for private purposes if you want to claim a travel deduction.”
We agree however, that if no private travel was done no apportionment of the expenditure is necessary and consequently, the logbook may not be required. This is because there will then be no need to do a section 23(a) or 23(g) adjustment (or apportionment).
Flemming’s case didn’t deal with the issue of private use. Remember also that private use would include travel between home and work.