Hide
Earn under R350,000? Click here to see why you still need to file to get your Tax Refund.
CLOSE
Get SARS Tax Deadlines in your Inbox
 

We'll tell you when you need to file, along with tax tips and updates.
Try Tim Now

Tax advantages of leasing a car?

Posted 2 September 2013 under Tax Questions


Hi, I'm Tim!
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →
Hi, What are the advantages of leasing a vehicle for a business, tax benefits? Can I write off the lease payments made on the vehicle as expenditure and claim back from SARS?
Thanks.

This entry was posted in Tax Questions and tagged , , , , , , , . Bookmark the permalink.

TaxTimTaxTim says:
2 September 2013 at 23:23

What work do you do that requires a car, and are you paid a commission?


David says:
3 September 2013 at 10:57

I own property in Limpopo and the Gauteng province and I manage them so I travel between the provinces and I'm not paying myself commission.
Thanks


TaxTimTaxTim says:
3 September 2013 at 23:42

So you run the business in your personal name and work for yourself?


David says:
4 September 2013 at 9:04

The business is formally registered and yes I'm self employed.


TaxTimTaxTim says:
5 September 2013 at 0:30

There are two issues here, if you purchase a car in the name of the business and you use the car for work and business purposes then the use of the car will be deemed to be a fringe benefit in your hands and you will be taxed on this. The amount that will be included in your income, if the care is leased, will be the actual lease payments which can be exceptionally high and therefore increase your taxes owed quite a bit. Further in order to reduce this, you will need to keep a detailed logbook in order to claim any deduction against this allowance. The case becomes even more difficult if you are not paying commission either.

It may work out better for you to lease your own car and then claim the travel costs at the AA/SARS prescribed rate per km for all business mileage traveled, which includes full wear and tear. You could do a test based on the levels of income of you and the company.


Get SARS Tax Deadlines in your Inbox
 

We'll tell you when you need to file, along with tax tips and updates.

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →

Hi, I'm Tim!
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE