Individual taxpayers have previously enjoyed the flexibility of 4 different methods with which to claim motor vehicle expenses:
- Cents per Kilometre method (only available up to 5,000 business kilometres)
- 1/3rd of Expenses (only if car has travelled > 5,000 business kilometres)
- 12% of Cost of Vehicle (only if car has travelled > 5,000 business kilometres)
- Logbook method
From 1 July 2015, the 1/3rd of expenses method and the 12% of cost of vehicle method have been removed. This means, in many cases, taxpayers will be forced to keep a written logbook for 12 weeks (3 months) to be able to justify the business use proportion of the vehicle.
For those taxpayers who previously relied upon the 1/3rd of costs or 12% of cost methods, we suggest you start to keep a logbook now to substantiate your claim for the 2016 tax year. Logbooks are valid for 5 years unless the business use changes substantially.
If you would like a Hanrick Curran logbook, please contact us for a free copy.
The cents per kilometre method used to have different rates depending upon the engine capacity of the vehicle. This has now changed to a single rate of 66 cents per kilometre (up to a maximum of 5,000 kilometres travelled for business).
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.