Do you have to submit a day to day logbook of all your kilometres - even when there is months where no business km's were traveled? Or can you only state the total private km's for the month from the 1st to the 30th of the month? Kilometers traveled for b
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
We don’t know if the taxpayer in this instance received an allowance (for business travel), or needs to reduce the taxable benefit or is making the deduction against income derived from an independent trade or commission. The principles would however be the same.
In terms of section 29 of the Tax Administration Act, a person must keep records, books of account or documents that enable the person to observe the requirements of a tax Act. The requirements of the Act to keep records, books of account or documents for a tax period apply to a person who has submitted a return for the tax period, etc.
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.”
Section 8(1) (which applies when the person received an allowance) refers to ‘a distance travelled during the said year for business purposes” and then merely say that business purposes excludes ‘private travelling’. It is therefore submitted that it should be sufficient if record is kept of business travel.
The return of income, the ITR12, has a place to record the opening and closing kilometres at the beginning and end of the year. The Act doesn’t say that it is compulsory to record that for each trip and it certainly is not a requirement of section 8. All that is required is that the taxpayer must determine the business kilometres. Whilst that would require the taxpayer, specifically when the previous trip was a private one, to use the kilometres at the start of the trip and at the close of the trip, we agree that there is no requirement that this be recorded.
We therefore agree with your view. Admittedly SARS may, on review or during an audit, feel that they require the opening and closing reading for each trip. The taxpayer would then have the onus to prove the business distance and would well be able to do that with reference to the distance recorded on the day. It may of course be possible to also provide other evidence.