SARS persist in requesting Reasons for Business Trips undertaken by my client as recorded in DETAILED LOG BOOKS submitted. In reply to all SARS requests contained in the letters for Verification, Relevant Material, Substantiating Documents (the latter aft
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
We understand that, in response to the rule 8(2) SARS may require a taxpayer to produce the additional substantiating documents necessary to decide the objection. We accept that the rule 8(2) request didn’t merely request the logbook – they were presumably provided in response to the verification request.
We don’t know what the ground for the objection was, but that is not relevant for purposes of your request. The principle is that the taxpayer must prove the part of the allowance that has “been actually expended on travelling on business”.
The practice generally prevailing in this regard reads as follows:
“Taxpayers wishing to claim the cost of business travel must base their claim on the actual business kilometres travelled and are required to prove the business kilometres travelled to the satisfaction of the Commissioner.
In order to do so recipients must keep accurate written records of their business travel and include, at a minimum, the following information:
-
The odometer reading on the first day of the year of assessment.
-
The odometer reading on the last day of the year of assessment.
-
For all business travel –
-
the date of the travel;
-
the kilometres travelled; and
-
business travel details (where and reason for trip).”
-
The practice generally prevailing continues by stating that an “accurate determination of what constitutes business travel is critically important and is determined by looking at the purpose of the trip and assessing whether it is for business purposes or private purposes.”
It doesn’t seem that the ‘where’ for the trip is in issue, but the reason for the trip is. We agree that the reason as was given should be adequate.
The next step of course is now to lodge an appeal to the disallowance of the objection. It may well not be necessary to re-do the logbook for purposes of the appeal, if it is clear from the documents in SARS’s possession that the same reason applies to each trip.
The practice generally prevailing in this regard reads as follows:
“Taxpayers wishing to claim the cost of business travel must base their claim on the actual business kilometres travelled and are required to prove the business kilometres travelled to the satisfaction of the Commissioner.
In order to do so recipients must keep accurate written records of their business travel and include, at a minimum, the following information:
-
The odometer reading on the first day of the year of assessment.
-
The odometer reading on the last day of the year of assessment.
-
For all business travel –
-
the date of the travel;
-
the kilometres travelled; and
-
business travel details (where and reason for trip).”
-
With regard to the opening and closing for each trip, the following is relevant:
The practice generally prevailing, see paragraph 4.5.2 of Interpretation note 72, is that “It is not necessary to record details of private travel (for example, that the recipient went to the movies on “x” date and the distance travelled was “y” kilometres) or daily opening and closing odometer readings.”
The practice generally prevailing continues by stating that an “accurate determination of what constitutes business travel is critically important and is determined by looking at the purpose of the trip and assessing whether it is for business purposes or private purposes.”