4 The Employer Grants the Travel Allowance
One of the key characteristics of an allowance is that it is granted by the employer.
In other words, the employee can’t demand that the employer pays him a travel allowance. The employer is in control and makes the decision. The only limit to the employer’s power in this respect is that legally he can only grant a travel allowance to a ‘qualifying’ employee.
Once the employer has exercised his right to grant a travel allowance, the legislation places certain duties and responsibilities on the employer to administer and tax the travel allowance in a legally compliant manner.
The responsibility starts with the requirement that the employer must estimate a realistic value for the travel allowance. To do this, the employer must know the determined value of the vehicle being used for the travel.