March 2018:
New changes were introduced to the way reimburisve travel allowances are taxed on the payroll.
The changes required the payroll application to determine the taxable/non-taxable portions of a reimbursive travel transaction for business kilometers travelled, based on the compensation rate.
For example: the application will use the input of the business kilometers travelled (which would be e,g, the odometer reading traveling for business, e.g. 10.50 kilometers) and multiply this with a compensation rate (dictated by policy of the company, e.g. R4.50 per kilometer), to calculate the taxable and non-taxable portion. The amount calculated, greater than the prescribed rate (R3.61 for the 2018/2019 tax year) becomes taxable on the payroll.
As result of this change, changes were made to the payroll applications, to accomodate input to ensure the taxability is calculated correct, and the correct values are reported on the tax certificates.The Reimbursive Travel (RT) screen and Reimburisve Travel History Report was introduced in the Release 5.0a software in March 2018.
The change had a considerable impact, since users had to review the way they capture these trandactions in the payroll and how the calculations were processed, to ensure all the required information was in the payroll, to calculate the taxable and non-taxable portions. The details of the changes and requirements, were publish in the software release notes of Release 5.0a in March 2018.
Release Notes 5.0a: Sage 200c VIP Ι Sage VIP (Premier/Classic)
May/June 2018:
The new changes brought along new challenges, and based on requests, issues reported (rounded values used that did not comply with kilometers and compensation rate entered, 3 instead of 2 input values done on transactions) and observations made by our support teams, Sage released an updated version Release 5.0b, which included improvements and new validations to assist clients in ensure the transactions are captured correctly.
The new release was not a mandatory update, and details of the software release was communicated with the June and July support newsflashes.
Release Notes 5.0b: Sage 200c VIP Ι Sage VIP (Premier/Classic)
The software allowed users to generate the Reimbursive Travel History Exception Report to identify transactions with possible issues, as well as steps to resolve these issues (new RT Delete functions and RT screen improvements).
Click here to read our support document with more details of deleting transactions. It was important that correction for previous periods/months were done only after the payroll closed (payments made, reports printed) before going into a new processing period. We recommended that Professional Service Consultants assist with corrections process.
September 2018
The changes introduced with Release 5.0b, was included in Release 5.1a, which also contains the IRP5/IT3a Report according to the current tax year specification .
Release Notes 5.1a: Sage 200c VIP Ι Sage VIP (Premier/Classic)
Click here to review the Reimbursive Travel documents for Release 5.1a, with steps to resolve possible issues. It was important that correction for previous periods/months were done only after the payroll closed (payments made, reports printed) before going into a new processing period.
* As per the documention, we recommend that a Professional Service Consultant assist you with corrections (consultation fees applicable)
Disclaimer:
It is important for recipients of reimbursive travel allowances are aware that the total amounts received can become taxable on assessment, if the employees received a travel allowance (fixed amount) and/or is reimbursed at a rate higher than the prescribed rate - a logbook should be kept for all business kilometers travelled.
This post only addresses issues related to the Reimbursive Travel (RT) screen and impact on the IRP5 export file.