Claiming motor vehicle expenses?

Source:ATO

15 October 2020

You can claim motor vehicle expenses that are part of the everyday running of your business, such as travelling between different business premises and visiting clients.

Common expenses include:

fuel
repairs
lease payments
insurance registration
depreciation.

If you operate your business as a sole trader or partnership and use a car as part of the everyday running of your business, you can work out your claim using the:

cents per kilometre method, or
logbook method

The rates for the cents per kilometre method are:

68 cents from 1 July 2018 to 30 June 2020
72 cents from 1 July 2020.

It applies for a maximum of 5,000 business kilometres per car.

For the logbook method, you need to keep a logbook for at least 12 continuous weeks and work out the percentage of business use for each car expense.

You can only claim the actual costs of expenses based on receipts if you:

operate your business as a sole trader or partnership and use an ‘other vehicle’, such as motorcycles or vans designed to carry loads of at least one tonne
operate your business as a company or trust.

Always keep records showing how you calculated your claim.

Remember, if you use your vehicle for both business and private use, you can only claim the business portion of the expenses.