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Cape Town - On midnight March 5, the fuel price rose to a new record high. This price hike will not just leave major holes in the pockets of motorists but will also impact business operations.
Lourens Joubert, short-term insurer Santam’s head of commercial insurance, warns business owners to tighten guidelines for company vehicle and monitor usage.
“Companies could open themselves up for alarming fuel bills if they do not put into place strict guidelines to monitor the usage of company vehicles, especially when these are also used in personal capacity by employees,” says Joubert.
Business operations that provide company vehicles for use by employees often incur an exorbitant amount of unnecessary expenses, which will inevitably also have tax implications.
It is not unusual to find that a percentage of these costs reflect non-business use or outright waste.
“Use of a company car is an important responsibility that an employee should take seriously, and it is vital for companies to set out rules and guidelines.
"While personal use may be allowed by certain companies, employees should not take advantage of that opportunity by embarking on excessive trips and unnecessary usage,” adds Joubert.
Companies should put measures in place to monitor vehicle and fleet usage. As it may not be easy to prohibit personal use of business vehicles, companies can follow the following guidelines to keep track of usage:
• Employees should maintain a daily travel log listing mileage driven, destinations and the reason for each trip.
• Selecting the right vehicle model with the lowest emissions usually is the most economical, and this also plays an important part in company car tax calculations.
With another fuel price increase likely to take place next month, it is vital for companies to manage company car driving effifciently, as it does impact on the economic well-being of the company.
- Fin24
* Visit our Budget Centre for full coverage of the 2013 Budget Speech, including a sin tax and personal tax calculator.
Lourens Joubert, short-term insurer Santam’s head of commercial insurance, warns business owners to tighten guidelines for company vehicle and monitor usage.
“Companies could open themselves up for alarming fuel bills if they do not put into place strict guidelines to monitor the usage of company vehicles, especially when these are also used in personal capacity by employees,” says Joubert.
Business operations that provide company vehicles for use by employees often incur an exorbitant amount of unnecessary expenses, which will inevitably also have tax implications.
It is not unusual to find that a percentage of these costs reflect non-business use or outright waste.
“Use of a company car is an important responsibility that an employee should take seriously, and it is vital for companies to set out rules and guidelines.
"While personal use may be allowed by certain companies, employees should not take advantage of that opportunity by embarking on excessive trips and unnecessary usage,” adds Joubert.
Companies should put measures in place to monitor vehicle and fleet usage. As it may not be easy to prohibit personal use of business vehicles, companies can follow the following guidelines to keep track of usage:
• Employees should maintain a daily travel log listing mileage driven, destinations and the reason for each trip.
• Selecting the right vehicle model with the lowest emissions usually is the most economical, and this also plays an important part in company car tax calculations.
With another fuel price increase likely to take place next month, it is vital for companies to manage company car driving effifciently, as it does impact on the economic well-being of the company.
- Fin24
* Visit our Budget Centre for full coverage of the 2013 Budget Speech, including a sin tax and personal tax calculator.
