Dear fellow taxpayer,

Welcome to your very first Tax Bulletin of 2009. I hope you are well rested and ready to tackle any challenges this year may throw at you.

Not surprisingly, one of the first challenges we’re forced to deal with comes from SARS, but luckily we’ve been given some leeway until the end of next month.

What challenge am I talking about? The infamous changes to provisional tax payments announced late last year of course.

The effect of the changes is that you can no longer rely on SARS' estimate when paying your provisional taxes. Now, you must make your own estimate. The estimate must be within 80% of your final taxable income for the year or you’ll face penalties.

The changes were supposed to take effect immediately, but SARS has acknowledged that a grace period is necessary to alleviate the burden on provisional taxpayers. 

SARS will, until 28 February 2009, accept provisional tax filings based on the SARS estimate. All taxpayers with a 28 February year-end (including all individual taxpayers), will benefit from this special dispensation. This means that you can continue doing your provisional taxes as you’ve always done until then.

The bad news is if your company’s fiscal year-end is on or after 1 March 2009, you don’t qualify for the reprieve and the new provisions apply to you with full effect!
 
Mailbox
Answered by Matsika Vengesa of Tax Consulting SA

Can we claim a travel allowance even if the employee didn't really travel?

Dear Matsika,

Our offices are in Pretoria, and we have an employee who lives in Johannesburg.
 
We have a client who’s also based in Johannesburg and the employee provides on-site support to this client. Even though the employee might only travel about 10km to the client's premises, would the employee be able to claim the distance from Pretoria-to-Johannesburg-to-Pretoria on her annual return to SARS?

(If the employee cannot claim business kilometres from home to office, surely she can claim from the office to the client even though she may not have physically driven to Pretoria?)

Answer:

Travel claims can only be made on the actual distance travelled for business purposes. Therefore, in your employee’s case, when she has to see clients in Johannesburg and she travels from her residence in Johannesburg, she can only claim for that distance.

She’ll have to keep an accurate logbook that evidences this travel as being for business purposes.

Until next week.
 
Regards
 
Nothando Hlatshwayo

Managing Editor
The Practical Tax Handbook