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Tax Talk

Tax Talk

Author: Natalie Wocke
Date: 2014-10-17
EMPLOYMENT AND FRINGE BENEFITS

POOL VEHICLES
A frequently asked question is whether a vehicle owned by a company, but is also available for use by employees, and is in fact used by them for business purposes, is a pool vehicle which genuinely does not attract fringe benefits tax, and when will it not qualify as a pool vehicle, in which case the primary user will be liable to fringe benefits tax on the private use of a company vehicle.

The following requirements must be met for there to be not fringe benefits tax. All the following requirements must be met:
1) The vehicle may not be kept at or near the employee's residence when not in use, outside of business hours.
2) The vehicle must not only be available to, but actually used by employees in general.
3) Any private use of the vehicle by an employee should be incidental to business use, and infrequent.

Where an employee's duties are such that they are required to have access to the pool vehicle outside of working hours, due to the nature of their duties, no fringe benefit will be ascribed to the vehicle taken home, if:
- The only private use permitted by the employer is incidental use which should be infrequent, or
- Travel between work and home.

Where a vehicle is assigned to a particular employee, and they enjoy unrestricted use of the vehicle outside of working hours, the employer will be liable to levy fringe benefits tax on the private use of a company vehicle. The employee may claim a reduction on assessment, for business use, where a logbook with accurate records of business use is maintained.

Roberts and Chaplin have branches in Umhlali (032)947 1010 and Ballito (032) 585 0387 to assist with your specific matter.