Dear fellow taxpayer,

A client of mine was horrified to find that she was taxed for using the company pool car. “But I thought a pool car could be used tax free” she exclaimed as she sat across from me.

It is...but only if you use it correctly! Where the car is genuinely used as a pool car, no fringe benefit will arise!

The pool car must be shared amongst the staff in general. It must be generally available to, and be used by, the employees.

The car mustn’t be kept at your home at night and your private use of the car must be infrequent and merely incidental to its business use.

Here’s a tip!

The car won’t be a taxable benefit if the nature of your work requires regular business use of the vehicle after hours AND you aren’t allowed to use the vehicle other than for business purposes. So for example, if you’re on standby, you’d be allowed to take the pool car home without triggering a taxable benefit.

Turn to update 5/2008 of your Practical Tax Handbook for more on company cars and vehicle allowances.

Until next time.
 
Regards
 
Nothando Hlatshwayo
Managing Editor
The Practical Vat and Tax Handbooks