If you are claiming a deduction for using your own car in performing your employment tasks(including a car you lease or hire), it is considered as a car expense.
If you are using someone else’s car for work related purposes, you may be able to claim the direct costs such as fuel as a travel expense.
If part of the travel was private, you can claim only the work-related portion.
Deductions can be claimed for work-related car expenses if you use your own car in the course of performing your job as an employee, for example, to:
– carry bulky tools or equipment (such as an extension ladder) which your employer requires you to use for work and cannot leave at work
– deliver items or collect supplies
– attend conferences or meetings
– travel between two different places of employment, provided one of the places is not your home (when you have a second job as an example)
– travel from your workplace to an alternative workplace that is not a regular workplace back to your workplace or directly home
– from your workplace or your home to an alternative workplace that is not a regular workplace (for example, a client’s workplace) while performing your employment tasks.
Most people can’t claim the expenses of travel between home and work because this travel is private.
The two methods available for car expense deductions from 1 July 2015 are:
– cents per km method
– logbook method
Cents per km method
Under the revised method, individuals can use 68 cents per km for all motor vehicles for the 2018–19 income year. The rate for 2017–18 was 66 cents per km.
– Your claim is based on 68 cents per km for 2018–19 income year (66 cents per km for the 2017-18 income year).
– You can claim a maximum of 5,000 business kms per car only.
– No written evidence required but you are required to be able to show how you worked out your business kms (for example, by producing diary records of work-related trips).
Where you and another joint owner are using the car for separate income-producing purposes, you can each claim up to a maximum of 5,000 kms.
Claim is based on the business-use % of the expenses for the car.
The logbook is required to show :
– the logbook period from beginning till end, and the odometer readings at these times
– the total number of kms the car travelled during the logbook period
– the number of kms travelled for work purposes during the logbook period based on the journeys recorded for the period
– the business use percentage for the period.
Entries in the logbook for each business trip are required to be made at the end of the journey (or as soon as possible afterwards) showing the:
– date the journeys begin and end
– odometer readings at the start and end of the journeys
– kms travelled on the journeys
– reason for the journeys.
– the accurate odometer readings at the start and at the end of each income year you use the logbook method.
If you are using the logbook method, you can claim the business-use % of each car expense, based on the logbook records of your car’s usage.
You can do this by:
– dividing the exact distance travelled for business purposes by the total distance. Multiply by 100 to get the percentage
– determine the total expenses, including depreciation, for the income year
– multiply the total expenses by your percentage to find the total amount that can be claimed.
Under this method you are required to:
– have a pre-printed logbook which is available from stationery suppliers, or make your own logbook
– have written evidence of the fuel and oil costs, or the odometer readings on which your estimates are based
– have written evidence for all other expenses.
You can use a logbook and record work-related car trips using the myDeductions tool in the ATO app. If you use and record your trips using myDeductions you are not required to keep paper records.
Your records can show the make, model, engine capacity and registration number of the car.
Claiming Car Expenses
You can claim in your tax return car expenses including running costs and decline in value but not capital costs, such as the purchase price of your car .
– Fuel / Oil
– Lease / Interest
– Tyres / Batteries
– Some Other Expenses if Applicable
You can claim oil and fuel expenses based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you owned the car during the income year.
Written evidence is required for all other expenses for the car.
Your logbook is valid for five years and required to cover at least 12 continuous weeks.
If you started to use your own car for business purposes less than 12 weeks before the end of the income year, you can continue to keep a logbook into the next year to cover the required 12 weeks.
Online Tax Return process is now easy and affordable at TaxRunner.