I have a company car and keep a log book. I want to claim against it as I get taxed a perks tax on my pay slip. MY private miles for the year were 7500 odd and busisness were 15600 odd. What is the formaula to work it out for use of motor vehicle deduction?
Quakedog, you can only claim business km against travelling allowance that you recieve. Free use of company car is taxed at 3.5% per month, there is limited expenses that you can claim against the 3.5% perk tax per month.
The official table per IT Act allows for a FIXED, which is determined by the value of your vehicle A- seemingly your vehicle is a company car, the value will be available from your payroll dept. There is also a running expenses table (per km). The method is to reduce the FIXED portion to a A"per kmA" rate (FIXED divided by 23100) add the allowable A"per kmA" running cost and apply this (total per km rate) to the business km (15600) recorded in your log book.
chattychat, sorry but me thinks you are wrong. i have not yet had to do a calc and i have not read up on it in detail, but my understanding is that : quakedog, i assume that your taxation works normally, ie you are being taxed on 80% of : 3.5 % (3.25% if approved maintenace plan) on the full value of the vehicle INCL vat. check with your HR dept. some people do not bother with a logbook as they know their private mileage is significant. they either consent to a voluntary over deduction of tax to 100% of above in order to avoid having to pay in tax on the 20% on assessment. (or they just pay on assessment) under certain conditions, the 80% inclusion rate can be reduced in order to alleviate the monthly tax burden, but only where business travel is significant. for you, it would make sense to claim, considering your mileage split. it works really simple as far as i know, no tables of fixed and variable costs etc (this is where chattychat went wrong, these only apply to CAR ALLOWNACES where no actual record of expenditure was kept) your TOTAL mileage is 23100. your business mileage is 15600. therefore your business component is 15600/23100 = 67.53% . IF you have paid taxes as i assumed above at 80%, then you will be able to claim back 12.47% (80 minus 67.53%). i will actually read up on it now, you have sparked my interest....
chattychat, i would imagine you may eat your words. my thoughts may indeed be worth more than your uncommon knowledge...but i think i did make a mistake in my conclusion on the percentages, so my apologies, i will illustrate and also clarify : SARS has 2 inclusion rates for this fringe benefit tax, 20 and 80%. if you can prove to SARS your biz mileage is 80% of total mileage or more, you will in fact be allowed to apply the 20% inclusion. assume your car DV is 250 000 (incl VAT but excl finance charges), the FB rate is 3.5 % (3.25% if a maintenance plan is included) , 250 000*3.5% = 8750 (105 000 pa) at > 80% biz travel, you will only pay tax on 1750 per month else you will pay tax on 7000 bucks per month. at the end of the year : total FB value 105 000 (tax @ 40% on 84 000 = 33 600) less biz travel 70 909 (15600 / 23100 * 105 000) Value of FB on assess 34 091 (in tax terms @ 40% 13 636-40) Tax refund (19 963-60) preston made another point. additionally, IF you have incurred expenses like license, insurance and fuel then you can claim those in proportion to your biz mileage as well. (ie 67 odd % of the rand amounts) all above is useless if you do not compile a logbook. that is a MUST. for those that dont, they will have to pay in the extra taxes over and above the inclusion rate applied.