Q: A company is
giving travel allowances to employees (taxed), but also supplies them with
petrol cards. These petrol cards are used for private and business travel.
Should they be taxed as fringe benefits? My opinion is that the portion used on
the petrol card for private travel should be a fringe benefit, while the other
used for business travel should be added to travel allowance.
A: In our view
the petrol card merely represents a variable travel allowance per s8(1)(b) ITA
and the amount used by the employee during any month should be added to the
fixed travel allowance under IRP5 code 3701. The PAYE should be determined per
the Fourth Schedule based on the anticipated business use and the employee will
then have to claim against the allowance on assessment by providing relevant
supporting information including a proper logbook.
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.
I have a situation where the payroll was adjustment with the fuel usage being added to backpay in the system, therefore the full tax is being paid as if is added to salary. My problem is that is not correct, it should be added to the travel allowance. If the travel allowance is then to great for the annual claim from the logbook then it needs to be reduced.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.