Wilson & Assoc Chartered Accountants

Claim tax deductions for your car

What you can claim

You can claim tax deductions for your car expenses when you are using your car to:

•  perform your work duties

•  attend work-related conferences or meetings away from your normal workplace

•  travel directly between two separate places of employment if neither of the places is your home

•  travel from your normal workplace to an alternative workplace and back to your normal workplace

•  travel from your home to an alternative workplace and then to your normal workplace

•  perform work at different sites or bases

You can only claim a deduction for actual expenses, such as fuel, if you are using a car registered in someone else’s name, unless you have a private arrangement to regularly use that car.

What you can't claim

Deductions are not allowed when

•  You travel between home and work , even if you work outside normal business hours, unless:

     •  your home was a base of employment (that is, you were required to start your work at home and travel to a workplace to continue your work for the same employer)

     •  you are required to carry bulky tools or equipment that are essential for work

     •  there was no secure storage for the items at the workplace.

•  You have been reimbursed for your expenses.

•  You use someone else’s car for work purposes,

•  Your vehicle does not fit the definition of a car, such as

     •  a motorcycle

     •  a vehicle that has a carrying capacity of one tonne or more, such as a ute, truck or van, or

     •  a vehicle with a passengers capacity of 9 or more, such as a minivan.

For these vehicles, you can only claim a deduction for actual expenses you incur when you travel for work (such as fuel). 

How you can claim

You can claim car expenses under 2 methods: the cents-per-kilometer method, and the log book method.

Cents per kilometer method

Under this method, you can claim

•  a maximum of 5,000 work-related kilometres per car 

•  68 cents per kilometre for the 2019–20 financial year  and 72 cents per kilometre from 1 July 2020.

The cents per kilometre rate allows for all expenses including registration and insurance, maintenance, repairs, fuel costs and wear and tear (or depreciation).  

You need to keep a diary of the trips and distance, to support the kilometers you claim, besides evidence that you own the car.

The log book method

The key requirement is to keep a logbook for a continuous, representative 12-week period. 

You need to record the starting odometer, the trip purpose and distance.

You claim the business or work percentage of your total car expenses.

Your business or work percentage is your total business trip kilometers as a proportion of the total kilometers your car has travelled during that 12 weeks period.

You can claim running costs. You cannot claim the purchase price or cost of major modification, but you can claim depreciation.

You need written evidence for all car expenses, of ownership  and  the starting and ending odometer readings.

Click to download our MV logbook template 

About Wilson & Assoc

Wilson & Assoc Chartered Accountants provides taxation and business advisory services to individuals, investors and businesses wherever you are based. We provide specialist services to startups and health care providers.

If we can help in any way, we’d like to hear from you.

DISCLAIMER

Information provided on this website is general information only and should not be treated as professional advice.  You may not rely on the basis of currency or accuracy of the information. We disclaim liability to all persons or organisations for any loss or damage suffered as a result of such reliance.  Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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