New rules for claiming car expenses
Are you a sole trader or an individual in a partnership? Do you claim a deduction for business-related car expenses when you do your tax return?
There have been changes to how you calculate your deduction. Read about the changes and the records you need to keep now to maximise your claim.
From 1 July 2015, you can no longer use the one-third of actual expenses and the 12% of original value methods. For the 2016 financial year (and future years) there will only be two ways to calculate your claim.
Cents per kilometre method
You now use a single rate of 66 cents per kilometre for all motor vehicles (regardless of the size of the engine).
You can claim a maximum of 5,000 business kilometres per car using this method.
To use this method you need to keep a logbook for a minimum continuous period of 12 weeks.
You will need odometer readings for the logbook period and you can claim fuel and oil costs based on these records, or actual receipts. You will need written evidence for all other expenses.