88 C.R. - "Automobile Rules" - Allowances to Employees"

An employee may not include in his income an allowance that is excluded by s. 6(1)(b), and then claim a deduction for his actual expenses.

Flat monthly payments or advances that are based on an estimate of business kilometres to be driven with an agreement for a year-end adjustment based on the actual business kilometres driven, will satisfy the requirement in s. 6(1)(b)(x).

• A car allowance generally (but not always) will be considered reasonable if it does not exceed the 27 cents/21 cents amount.
• For 1988, where records are not available to substantiate the computation of a per kilometre allowance, RC is prepared to consider such other substantiation of the reasonableness of the allowance as may be available.