When You Can Claim Vehicle Expenses?
You may be eligible to claim a deduction for your vehicle expenses if some of the expenses incurred using your own vehicle in the current financial year are related to work. Some examples may include:
- Getting an allowance from your employer for using your motor vehicle.
- Travel between two separate places of employment.
- Travel to Clients from your work place.
- Attending Conferences or meetings
- Delivering items or collecting supplies.
When You CAN NOT Claim Vehicle Expenses
Be aware that there are certain types of travel expenses you are never able to claim. For instance, the travel from home to the first point of business. Travel from home to work or work to home is never a deductible expense.
For Example: If you are a travelling sales person, you wouldn’t be able to claim the travel from your home to the first customer of the day. However, from the second customer onwards deductions can be made.
How To Claim
There are two methods for claiming Motor Vehicle Expenses:
1. Cents Per Kilometre method
The Cents Per Kilometre method is based on 66 cents per km(for FY17) up to a maximum of 5,000 business km per car. If you are using this method you need to at a minimum keep a diary recording the work related trips for the financial year.
2. Log Book Method
The Log Book Method is based on the business-use percentage of the running costs & decline in value expenses for the car in comparison to personal use. To use this method you need to keep a logbook for a minimum of a 12 week continuous period in order to work out the business-use percentage. Fuel and oil costs can be estimated based on odometer records or you can use actual receipts. You will need written evidence of all other expenses related to the car in order to claim the business-use percentage related to the expense.
* Remember that the above is general advice and for specific advice relevant to your personal circumstances, we strongly recommend you seek help from a Tax Professional.