The Travel Deduction Calculation

The Travel Deduction Calculation


With the tax filing season opening on 1 July you should be preparing the supporting documentation that will be used to submit your 2015 tax return.

If you have received a travel allowance it is important to remember that you must have a detailed logbook in the format required by SARS to justify any travel deduction claim. With approximately one in three returns being verified by SARS there is a high possibility that you will be required to submit this logbook to SARS for scrutiny.

For those taxpayers who are used to getting a healthy tax refund due to their travel claim it is important to note that the travel deduction will be slightly less (if comparative mileage is done year on year) when it comes to submitting your 2016 tax return. The reason for this is because SARS has reduced the fuel rate in the deemed expenditure table (from R 3.30 in the 2015 tax year to R 3.18 in the 2016 tax year).

Whilst the fixed cost and repair components increased SARS saw fit to reduce the fuel element because of the unusually low fuel price at the time. The logic of this decision was very strange considering the fuel price was at an unsustainable low and that the Ministry of Finance were also increasing the fuel and Road Accident Fund Levy.

Whilst some tax practitioners are advising taxpayers to keep a record of actual expenses incurred as a means of ascertaining their travel deduction, it may still be better for the average taxpayer to use the deemed expenditure method.

However taxpayers may keep accurate records and then compare the quantum of the deduction to the result of using the deemed expenditure method. Taxpayers may use the method that gives them the best result when completing their tax return.