Whether you’re an individual using your own car for business purposes, or responsible for managing a company fleet, a logbook is an essential business tool.
Admin: an element which most employees on the road like to avoid. So when it comes to travel logbooks, most employees have the same approach - procrastinate. Logbooks do, however, make life simpler for the employee that needs to claim back from tax and if used correctly can definitely enable a fleet manager to manage their fleet more efficiently.
For tax returns, logbooks are typically used by employees who drive company cars or receives a vehicle allowance.
In principle, a logbook is a “report” which determines the amount of private mileage and business mileage you complete with in a tax year cycle. The report is allocated to an employee being taxed, taking into account the vehicle they are being taxed on. Should the employee receive a new vehicle in the same cycle then they would report the mileage as per the date they have taken delivery of the new vehicle and the previous vehicle would no longer be taken into account.
For fleet and line managers the logbook can be a tool to identify the whereabouts of an employee on specific times, specifically to customer facing employees. The logbook can also be used to calculate total mileage travelled and assist with any possible deductions for private mileage travelled should the employer feel the need to. Willie Venter, the Fleet Consulting Manager at EQSTRA Fleet Management, runs through the advantages of implementing a logbook system in your fleet.
The importance of a logbook and its 3 main advantages:
- DATA - Line managers can track employee whereabouts should it be questioned. Fleet managers can obtain mileage travelled which can be used to calculate cost per kilometer per vehicle. Employees can use it as a way to report back on call cycles and to prove business travel claims while employers can identify excessive private usage to claim from the driver should it be part of the vehicle policy.
- COST SAVINGS TOOL- “In my experience we have identified many employees with access to a fuel card doing excessive private mileage ,” says Willie, “and with fuel taking up 40% - 45% of your total fleet operating costs, a logbook is the best way to identify private usage & manage this."
- CLAIM BACK TAX- Many employees and small companies make use of the standard SARS logbook which has clear guidelines on how to use it and when it needs to be submitted to SARS, because, with accurate records, it’s easy to claim business kilometers back from the tax man.
Fleet Managers and users:
However, failing to provide logbook details with your annual tax return can be an expensive mistake as the allocated monthly tax benefits are lost and the shortages would need to be paid back to SARS at the end of the tax year. Depending on the value of the car, this could amount to thousands of Rand.
In fact, all taxpayers with a car need to submit a logbook to SARS with their tax returns.
Your travel between home and your place of work cannot be claimed for business purposes, as this is regarded as private travel. A separate logbook must be kept for each motor vehicle that has been used for business travel during the year of assessment.
Rates per kilometer, which may be used to calculate the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are available on the SARS website.
Remember,SARS can request documentary proof for any claim in the logbook and apply penalties as it sees fit, or disallow claims that cannot be justified.
Modern logbooks: Why telematics units are the way to go
Telematics is the best way to ensure fleet logbooks are accurate and up-to-date. Data is recorded automatically and fleet managers don’t need to rely on drivers to fill in the information. The telematics unit installed in the vehicle has a switch that can be set to either ‘Personal’ or ‘Business’ and usage is automatically recorded in the relevant category.
Telematics units also help to record a lot more detail such as specific routes, the amount of time a vehicle is stationary and the exact location of any vehicle at any time.
Armed with all this information good fleet managers are able to optimise all aspects of their fleet. For large companies this can mean saving millions and increasing productivity. For smaller companies it can mean the difference between expanding or running into debt.
No matter the size of your company or fleet, keeping accurate logbooks is essential.
Get a copy of your logbook today!