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Larry said: 1 July 2015 at 16:44 Under "travel claim against allowance" Does lease payments refer to the monthly car repayments I make to Wesbank? |
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TaxTim Evan said: 1 July 2015 at 16:46 A lease payment would be if you have a "rental" each month, otherwise the wear and tear would be the car cost / 7 years and the interest on your loan under finance charges. Please make use of our Travel Allowance calculator. |
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Larry said: 1 July 2015 at 17:34 Thank you for your prompt reply. What do you mean by car cost / 7 years and interest on your loan under finance charges? Sorry if this is a really basic thing to understand, I just want to make sure :) |
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TaxTim Evan said: 1 July 2015 at 17:37 The value of the car can be depreciated over 7 years, so you would divide the cost by 7 and show that under the Wear and Tear questions. This is because the value of the car can be assumed to be replaced after 7 years, as if you are saving for a replacement over that time. The finance charges would include the interest paid on your borrowed money from Wesbank in order to finance the car. |
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Larry said: 2 July 2015 at 21:52 Thank you. Final question on this subject - so the final wear & tear figure will be calculated as follows: (All the interest paid on the borrowed money from Wesbank) (value of car / 7 years) = total wear & tear? Please confirm if my understanding is correct? |
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TaxTim Evan said: 2 July 2015 at 22:34 You would take the actual value of the car - so what it was worth when you bought it, not the interest amount - the value if you had paid cash and divide that by 7. The interest is separate and goes under finance charges. |
