Motor Vehicle Expenses
There are now only 2 options available for the claiming of tax deductions for motor vehicle expenses:
1. A flat rate as advised by the ATO per km, currently $0.68 per km (capped at 5,000 business km). This is known as the "cents per km method". We note there is no logbook required to be kept for this option. You must simply be able to demonstrate to the ATO in the event of an audit how you calculated the number of business km travelled.
2. The 'log book method'. This involves the maintenance of a logbook for a representative continuous 12 week period where business or work related trips are noted. This forms what is known as the business use percentage which can then be applied to all motor vehicle expenses (for that vehicle) for a period of up to 5 years, unless a significant change in usage occurs. Should you wish to pursue this method we have attached a template logbook below, alternatively the ATO have an App that you can install on your smart phone and use to record motor vehicle use and expenses. Click here to find out more.
We suggest that regardless of the method you choose above, you ensure the recording of your motor vehicle's odometer reading at 30/6 of each financial year. This is an optimal record-keeping measure and may assist in the event of an ATO audit.