Staff author
Your car could be your biggest tax deduction, and you're not claiming it
Driving your personal car to visit clients or attend off-site meetings costs you money. The tax law provides a way to reimburse you for that fuel and wear-and-tear, provided you keep a very specific daily record.
How it works
Section 8(1)(b) of the Income Tax Act allows you to deduct business travel expenses if you receive a travel allowance or earn commission. You must record the date, destination, business purpose, and opening/closing odometer readings for every single trip in a formal logbook. A rough guess at the end of the year guarantees a rejected claim.
Specific Scenarios
* Scenario 1: The travelling salesperson. You receive a monthly travel allowance. You drive to four different client warehouses a week. You log every kilometre and claim a massive deduction against your allowance at the end of the year.
* Scenario 2: The site manager. You use your personal bakkie to drive between various construction sites. You record the exact odometer readings for every site visit and submit your logbook to SARS for a tax break.
* Scenario 3: The commission earner. You work as a real estate agent. You log all the kilometres you drive while taking clients to property viewings. You use this logbook to heavily reduce your taxable commission income.
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When you are not eligible
You cannot claim any kilometres driven between your house and your regular office. SARS classifies this daily commute as private travel. You also forfeit the claim entirely if you fail to maintain a compliant, detailed logbook.
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Disclaimer:This article is for informational purposes only and does not constitute financial or tax advice, and is not exhaustive. Tax laws are complex and subject to change. We strongly recommend consulting with our registered tax practitioner to address your specific circumstances.