![]() The business-use percentage is applied to all motor vehicle expenses including fuel, insurance, registration, repairs and depreciation e.g. This method can be used if you travel more than 5,000 business kilometres in a financial year. The Logbook method allows you to use a business-use percentage which is determined by keeping a compliant logbook for a period of at least 12 continuous weeks.The maximum claim is 5,000 business kilometres, which equates to a maximum tax deduction of $3,300. The deduction is based on a reasonable estimate of business kilometres travelled and you are not required to maintain substantiation documents. The Cents per kilometre method enables you to claim up to 5,000 business kilometres per car at a flat rate of 66 cents per kilometre.The ATO allows two methods for calculating motor vehicle expenses from 1 July 2015, being the Cents per kilometre method and the Logbook method. We have provided below a brief summary of the tax and GST rules in relation to motor vehicles. One of the most common topics we are asked about at tax time is in relation to purchasing motor vehicles and claiming motor vehicle expenses. The Cents per kilometre and Logbook Methods Financial Reporting Accounting & Advisory.In conclusion, once the amount of business kilometres has been determined, the amount is to be included in ‘Item D1 – Work Related Car Expenses’ under the Deductions heading of the Income Tax Return. Another essential requirement is that a taxpayer must obtain written evidence of all car expenses such as registration, insurance, servicing etc. For each journey, the amount of kilometres travelled for income producing purposes in addition to a description as to why the journey was undertaken and the date and odometer readings of when it began and finished.įurthermore, if taxpayers intend to use the logbook method for two or more cars, each car must have its own logbook and the logbook for every car must cover the same twelve week period.Īll logbooks are valid for five years but taxpayers must record the opening and closing odometer readings for each year.The total amount of kilometres travelled during the period and.The date of the period as well as the odometer readings from when the logbook began and finished.The following information must be included in the logbook: In order to successfully use the logbook method, a business owner will need to record each business journey for a twelve week minimum continuous period. To determine the business percentage, taxpayers will need to divide the total business kilometres travelled by the total kilometres travelled by the car during the period. A benefit of this method is that you do not need to obtain written evidence of kilometres travelled, however the ATO may ask how the business kilometres were calculated.īy using the logbook method, it means that the owner of the car will be able to claim the maximum amount of car expenses as deductions based on the motor vehicles’ ‘business use percentage’. However, if the business kilometres travelled exceeds 5000 kilometres in a year, the claim will be limited to 5000 kilometres for that car. A single rate of 66 cents is to be multiplied by the total business kilometres – of up to 5000 kilometres for the 2015/16 financial year. Methods for calculating car claimsīased on the law that was established in the Tax and Superannuation Laws Amendment (2015 Measures No.5) Bill 2015, there will only be two ways for calculating work related car expenses as opposed to the original four methods in the 2015-16 financial year:ĭue to recent changes made by the government to the cents per kilometre method, different rates based on the engine capacity of a car are no longer available as of 1 July 2015. However, Business travel such as travel from home where a taxpayer must transport equipment that they require for work and travel to an alternate workplace CAN be claimed. Private travel such as car trips between a taxpayer’s home and workplace CANNOT be claimed. Determining work related car travelīefore a claim can be made, taxpayers must be able to calculate how much of the travel undertaken was work related. If a taxpayer owns or leases a motor vehicle that is used for work purposes, the Australian Taxation Office (ATO) allows the taxpayer to make a claim on their tax return under ‘Work Related Car Expenses’. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |