Ways to log your business trips for a tax deduction

If you want to claim a tax deduction for expenses incurred from using your private vehicle for business purposes, the South African Revenue Service (SARS) requires you to keep a logbook of your business trips for the tax year.

This may apply to you if you are a salaried employee paying PAYE tax and earning a travel allowance or if you are self-employed paying provisional tax (see “What expenses can I deduct from my business?”).

If you want to claim the deduction, you should be familiar with what is required and explore some of the apps that are available for taking the drudge work out of keeping a logbook.

What does SARS require?

According to the SARS website, it is compulsory to keep a logbook in which you record the kilometres you travelled for business purposes if you want to claim a travel deduction.

First, you must record your vehicle’s odometer readings on the first day of the tax year, March 1, and on the last day, February 28 (or 29), of the following calendar year. The difference between these figures will give you your total kilometres travelled for the year. SARS emphasises that without these readings, you cannot claim a deduction.

Second, for each business trip undertaken during the year, your logbook must contain the following minimum information:

• Date of travel;
  
  
• Kilometres travelled; and
  
  
• Travel details (destination and reason for the trip).

If you use more than one vehicle in a tax year, a separate logbook must be submitted for each vehicle.

You are not allowed to include in the business travel mileage that you claim as a deduction the trips you do from your home to your place of work and back, if you are working away from home.

Third, once you have a figure for total business kilometres travelled, you can calculate your deductible expenses in one of two ways:

1. Do the calculation based on the table of costs supplied by SARS each year. In this case you do not need to have kept an accurate record of all your fuel and maintenance expenses – simply use the costs linked to the value of your vehicle in the scale of costs that SARS publishes on its website.
   
   
2. Calculate your claim based on actual costs. In this case you will need to have kept an accurate record of all your car-related expenses during the year, including fuel, maintenance, lease and insurance costs.

You should also be aware that SARS requires you to retain your logbook for at least five years.

Can I use an electronic logbook?

SARS allows you to use an electronic logbook for recording and calculating your business kilometres, although these need to be in a format that is acceptable to SARS. The electronic logbooks available online come in various forms. Here are some examples of what you may find but please note that we are listing without endorsing these options:

• SARS has a free electronic logbook in the form of a PDF file, which you can download onto your computer and type in the details required. Go to the e-logbook page on its website.
  
• The TaxAssist website has a similar free download in the form of a spreadsheet file, which, if you fill in the mileages of each trip, will automatically do the calculations. Go to its downloads page.
  
  
• TaxTim has a free app that you can download on your smartphone. On each trip you need to open the app and type in your destination, before-and-after odometer readings, and reason for travel, and the app will do the rest, with all information stored in the cloud. You will get a summary at the end of the year and a full logbook record for SARS that you can download to use for your deduction and submit to SARS if you are asked to do so. Go to the TaxTim page here.

Apps that record mileage while you drive

Going a step further, you can let an app on your smartphone use your phone’s location in real time to record your business trips in your vehicle. Apps are available on Google Play (Android) and the App Store (iPhone). App providers typically have various versions of their apps on offer, from a basic free version to a more sophisticated version that requires a monthly subscription. Some can also be used by companies for fleet management.

Here is an example of a local product and an overseas one priced in dollars, also to give you an idea of what is available without recommending them:

• Trip Logbook is a local app specifically designed for South African taxpayers. It is available for Android and iPhone. For a monthly subscription of R124.99 (including VAT), the app will automatically track your vehicle mileage using your phone. You need to record whether you are doing a business trip or a personal trip. You can log trips using live tracking (GPS accuracy) or optimised tracking (battery friendly). The log can be exported in various formats, including in the SARS Logbook format. The app has a free 30-day trial.
  
  
• Psngr tracks all your trips automatically. It calculates mileage, travel times, expenses, private versus business vehicle usage, and more. Reports are sent periodically to your inbox. The free version allows you to record 40 trips a month recorded on one report. Alternatively, the subscription is US$10 a month for a single user for unlimited trips and reports.