Travel allowance

The car allowance will only be considered if you have a kept a log book detailing your business and private milage for the year. Remember that travel from your home to your place of work does not qualify for business travel. It is deemed to be private travel by SARS. Only travel from your place of work to clients counts as a deduction.

Most tracking units fitted for insurance purposes have a log book device which details your travel every time you start and stop on your travels. This is well worth the cost taking the schlep out of the keeping records during the year.

Retirement funding…

Retirement annuities are still deductible from your taxable income and should be maxed out every year as it is one of the best investments you can make towards your retirement. The deduction you get is the same rate as your marginal rate of tax. If you pay 30% tax then your dedication is 30%. So for every rand you save towards a retirement annuity you effectively only pay 70 cents. A 30% return before you start investing. The deduction comes with limits. If you are on a pension fund then you are limited to R1 750 and a provident fund limits you to R3 500 per annum. If you don’t contribute to a retirement fund with your company then you can deduct up to 15% of your taxable income.

Home Office Expenses

The lock down from COVID 19 forced many of us to work from home paving the way for a new normal into the future. This gives rise to a possible deduction of ‘Home Office’ expenses in certain cases dependent on how your salary is structured. A percentage based on the space of your home allocated to work can be applied to:

• interest on your bond
• rates, lights and water
• insurance on the house
• maintenance costs on the property
• security costs

Other allowances                                                                                                                                                    

You should also explore possible allowances with your employer for your computer and cell phone. Another opportunity for some is to claim reimbursive travel expenses at 361 cents for every kilometre of business travel you do.

There are conditions which apply before SARS will consider these deductions which should be explored with your company and/or a tax consultant.

The deadlines for submission is 16th November 2020 if you hand in your return and 16th November 2020 if you e-file.