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CAR ALLOWANCE VS COMPANY CAR (2)
Car allowance tax calculation – detailed logbook
kept
Assuming the following :
Value of car R186 000
Rate 14 % linked
Lease agreement 60 months
Engine capacity 1 501-1 800 cm3
Petrol price R7,10
Distance travelled 32 000 km
Estimated business travel 16 000 km
Estimated monthly expenses R7 167,00
Estimated annual expenses R86 001,00
Annual tax deductible expenses based on “ no
log book kept” R 40 879-00
Annual tax deductible expenses based on “log
book kept “ R 46 719 -00
Company Car Tax
The monthly taxable benefit is calculated at 2,5 per
cent of the determined value of the car excluding
VAT. Any non-standard accessories added to the vehicle
increase the vehicle's determined value.
Example:
R150 000,00 (Including VAT)
Marginal Tax rate = 40 %
Monthly tax payable = R1 315,79
In closing, the question is what SARS is likely to
do with regard to car tax. It's obvious that there
is a concern about the manner in which consumers submit
car allowance deductions to the receiver, and as seen
over the past two years we might see the following
further changes:
- Limited business mileage.
- Amendments to tax tables - maximum vehicle values.
- Amendments to kilometres deemed as private mileage.
Either way it would be good idea to keep accurate
records of both your private and business mileage
travelled, and also advisable to use a fuel and maintenance
card to account for all your vehicle related expenses. |
