Claiming car expenses based on ‘actual costs’

Know what you can claim, and the documents you need to substantiate it

WHEN AN individual taxpayer wishes to submit a tax claim for business travel, the tax return form provides the option of basing their claim on ‘deemed costs’ or ‘actual costs’. Since eFiling has largely automated the process of claiming based on ‘deemed costs, this article deals with claims based on ‘actual costs’.

However, it is important to note the following:
 Recipients of travel allowances may use either option, depending on their circumstances, and once they have calculated their claim according to both methods, may even choose the option that provides the best tax advantage. The ‘deemed cost’ basis tends to be more favourable in the majority of cases.
 However, commission-earners and taxpayers who trade under their own name (i.e. not via a corporate entity such as a company, close corporation, or trust) may not use the deemed option, and are therefore required to …