It is almost certainly more tax effective to use your own car for business and submit a travel claim against a travel allowance rather than drive a company owned car.

Because your travel claim is limited to your travel allowance, you will need to make sure that the allowance exceeds your estimated travel claim.

If you keep a record of actual expenses paid by yourself, you may claim those expenses, but most of us claim the Deemed Travel Expenses which you will find here. You will need to select the year that you are interested in.

Employers must tax 80% of the travel allowance unless 80% or more of the travel is on company business, in which case they must tax 20%.

You will have to keep a logbook. There is an eLogbook available on SARS website under Online Tools, but you’ll probably find it better to create one in Excel per the example below (but note that if you are keeping records of actual expenditure you will need to add the appropriate expenditure columns).

I only prepare mine once a year, using my diary as the source of information. As the distance from office to any particular client is always the same, you can copy and paste a lot to save time. As your logbook has the year’s opening, closing and business km, you can write simple formulae to calculate private and total km. The detail must include where you went and the reason.

If you use a company car, your employer must tax a fringe benefit of 3,5% per month (3,25% if the car is on maintenance plan) of the cost of the car including VAT. The fringe benefit is reduced in the proportion of business travel divided by total travel.

If the employee pays the license, insurance, maintenance or fuel, the fringe benefit is further reduced.

Employers must tax 80% of the fringe beneift unless 80% or more of the travel is on company business, in which case they must tax 20%.

Click here to buy a company from us, click here to buy a Trust from us and click here to get absolutely FREE, ONGOING business and Trust coaching, and tax advice.