Q: When a member of a
CC is reimbursed for the actual fuel expenses incurred on a monthly basis, will
the re-imbursement be subject to PAYE? The member submits his actual fuel slips
& 75% of the actual expense (fuel slips) is paid to him by the CC as a re-
imbursement of the fuel expense incurred. He uses his own vehicle in his own
name for company purposes, no travel logbook is kept.
A: Section 8(1)(a)(ii) ITA excludes from allowances any reimbursement that
was wholly used for the purposes of the employer’s trade and for which the
employee had to provide proof that it was so wholly incurred for business
purposes. In such instances no PAYE applies. Where the petrol was not used for
a single business trip or included private travel that the employee cannot
prove that to the employer it must be treated as a travel allowance and
subjected to PAYE.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.
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