If you use your own car for performing work-related duties (including a car you lease or hire), you may be able to claim a deduction on your tax return for vehicle expenses.
If the travel was partly private, you can only claim the work-related portion of the trip. If you are using someone else’s car for work purposes, you may be able to claim the direct costs (such as fuel) as a travel expense.
As the number of Australians making work-related car expenses continues to rise, the Australian Taxation Office (ATO) requires logbooks to be kept. By using a logbook, your tax deduction claim is based on your car’s “business use percentage”. Your business use percentage is the percentage of kilometres you travel in your car for business related purposes.
A logbook allows for easily calculation of business use percentage and easily provides evidence to the ATO. The ATO requires that logbooks are maintained for 12 continuous weeks, in which this period should be representative of your travel throughout the year.
If you started to use your car for work-related purposes less than 12 weeks before the end of the income year, you can continue to keep a logbook into the next year to ensure its covers the required 12 weeks.
To be valid, your logbook must contain the following information:
- when the logbook period ends
- the car’s odometer readings at the start and end of the logbook period
- the total number of kilometres the car travelled during the logbook period
- the number of kilometres travelled for each journey recorded in the logbook (if you made two or more journeys in a row on the same day, you can record them as a single journey). You will need to record the:
- start and finishing times of the journey
- odometer readings at the start and end of the journey
- kilometres travelled
- reason for the journey.
- the business-use percentage for the logbook period.
The ATO has created an app which has the ability to use GPS for a logbook, as well as approving a number of logbook and tracking systems which can be used to record work-related travel. Whilst the following list is not all of the available travel recording systems, all have had a class ruling and received approval.
If you have any questions in regards to any of the approved logbooks or for further assistance in keeping track of your work-related travel, please give Samantha Oliver, Accountant a call on 03 5443 0344.