Understanding ATO requirements

If you use your own car for work-related duties, including a car you lease or hire, you may be able to claim a deduction for vehicle expenses.

Where travel is partly private, you can only claim the work-related portion. If you are using someone else’s car, you may be able to claim direct costs such as fuel.

One common way to calculate your claim is the logbook method, which is based on your car’s business use percentage. This is the percentage of your total kilometres that relate to work travel.

To support your claim, the ATO requires you to keep a logbook for each vehicle you use for work purposes. A logbook is valid for up to five years provided it is still representative of your employment and the business use of the vehicle

What makes a logbook valid

A valid logbook must:

• Cover a minimum of 12 continuous weeks
• Be representative of your usual travel patterns
• Include a complete record of all trips taken during that period, not just business journeys, for each trip this should include start and end dates, start and end odometer readings, the kilometres travelled, and reason for each journey.

If you start using your car for work less than 12 weeks before 30 June, you can continue the logbook into the next income year.

Using logbook apps

The Australian Tax Office (ATO) used to list specific apps and tracking systems as ATO approved. Today, the ATO’s approach is much simpler.

There is currently no official ATO list of approved logbook apps. Instead, the ATO focuses on whether your logbook records meet the rules, not which app you use.

You can choose from:

• The ATO app (myDeductions), which includes a built-in vehicle logbook
• Third-party logbook apps designed to meet ATO record-keeping requirements:
  • Driversnote
  • GOFAR
  • DriverDirect
  • Little Logbook.
• Telematics or GPS systems, commonly used by businesses and fleet operators.

The ATO does not “approve” these apps, but many are built to produce compliant records. Where an app does not include all the information mentioned earlier, you must add those details when completing each logbook entry to ensure your logbook is valid for tax purposes.

During the logbook period, you need to capture:

• The start and end dates of the logbook period
• Odometer readings at the start and end of the period
• The total kilometres travelled during the period.

For each trip, record:

• Start and finish times
• Odometer readings at the start and end
• Kilometres travelled
• Reason for the trip.

From this, you calculate your business use percentage:

Total business kilometres divided by total kilometres travelled.