Car Expenses - What's under the bonnet?
If you use your own car for work purposes, you can claim a deduction using the cents per kilometre method or logbook method. If you use someone else's car for work purposes, you can only claim for direct costs you pay for - such as fuel.
You can claim a deduction for a car expense if:
- You use your car in the course of performing your work duties.
- You attend work-related conferences or meetings away from your normal workplace.
- You travel directly between two separate places of employment and one of the places is not your home.
- You travel from your normal workplace to an alternative workplace and back to your normal workplace.
- You travel from your home to an alternative workplace and then to your normal workplace.
- You perform itinerant work.
You can't claim a deduction for normal daily journeys between home and work except in limited circumstances where you carry bulky
tools or equipment (such as an extension ladder or cello) that:
- Your employers requires you to use for work.
- You cannot leave at work.
- If travel is partly private you can only claim the work-related portion.
- You can't claim a deduction for car expenses that have been salary sacrificed.
- You can't claim a deduction if you have been reimbursed for it.
You can calculate your car expenses in two ways.
Cents per kilometre method:
- You can claim a maximum of 5,000 business kilometres per car, using this method.
- Your claim is based on 68 cents per kilometre.
- You don't need written evidence but you need to be able to show how you worked out your business kilomtres (for example, by producing diary records of work-related trips).
- Your claim is based on the business use percentage of expenses for the car.
- Expenses include running costs and decline in value. You can't claim capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs (e.g. adding paint protection and tinted windows).
- To work out your business-use percentage, you need a logbook and the odometer readings for the logbook period. The logbook period is a minimum continuous period of 12 weeks.
- You can claim fuel and oil costs based on your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and end of the period you used the car during the year.
- You need written evidence for all other expenses for the car.
Your vehicle is not considered a car if it is a motorcycle or a vehicle with a carrying capacity of:
- One tonne or more, such as a utility truck or panel van
- Nine passengers or more, such as a minivan
Keep receipts for your actual expenses. You cannot use the cents per kilometre method for these vehicles. While it is not a requirement to keep a logbook, it is the easiest way to show how you have calculated your work-related use of the vehicle.
The Money Edge | Bundaberg