Can you claim your car expenses on your tax?
For the 2016 financial year (July 2015-June 2016) there is a new change to the way you can claim for motor vehicle related expenses in your tax returns. The options have been reduced down to 2 methods: Cents Per Kilometre or Logbook.
The even rate of 66 Cents Per Kilometre is claimable regardless of the type of car you drive. You can only use the Cents Per Kilometre claim for less than 5,000km annually. Whilst you don't need a Logbook, you do need to have diary records to justify your travel claims. A diary is less rigid than a logbook and could be your work calendar or appointment notes.
If you do more than 5,000km of work related travel per year you have a logbook. This method allows to claim for specific expenses such as petrol, maintenance, insurance, registration, etc.
Claiming for motor vehicle expenses is available for employees and businesses alike. The key criteria is whether your car is used for work purposes.
Our tips for claiming your motor vehicle:
- Don't claim for travel between your home & place of work (this is private use)
- You can claim for travel home from a meeting held offsite your normal workplace (for example you travel to a customer site and then go home afterwards - you can claim the journey home)
- Your logbook must have 12 concurrent weeks of records for every trip taken during this time - put the logbook on the passenger seat with a pen so you remember each time to fill it in
- A logbook can remain valid for 5 years if the nature of your travel doesn't change - so a little bit of pain in getting it done can last a long time
- If you use a logbook, you must yearly record the opening/closing odometer of your vehicle on 30 June/1st July
- If you have an employer paid vehicle or salary sacrifice you cannot claim for work related motor vehicle expenses
- There are great Apps available for smart phones that can be used to record your Logbook
- By using one debit card or credit card you can keep all your motor vehicle related expenses on one set of bank statements making it easy to find all the claims at the end of the year