Are you driving from work to client meetings and looking for a healthy tax refund this 2023-2024 financial year? If yes, then let’s turbocharge or streamline your deductible work-related car expenses by getting your records and expenses in order.

Is it a car? Less than one tonne and not more than 9 seats
The first step is to make sure your vehicle qualifies. If it is less than one tonne in weight and has seats to carry less than 9 passengers, the below recommendations apply to you.

Work-related travel is between work and work-related destinations
Importantly the focus is on genuine work-related trips between your usual workplace and other work-related destinations. This excludes daily private commutes from your home to the office and travel reimbursed by your employer.

THE TWO METHODS TO CLAIM WORK-RELATED CAR EXPENSES ARE CENTS PER KILOMETRE (KM) AND A LOGBOOK.

  1. Cents per km method
    Calculate deductions based on a ‘reasonable estimate of kilometres travelled’. It is the easiest approach to take and the easiest to claim. Please note it is capped at 5,000 km and you can’t claim any other costs.
    Rate for the financial year ended 30 June 2024: $0.85 cents per kilometre (KM) (maximum deduction of $4,250)
  2. Logbook method
    Keep a detailed logbook for 12 consecutive weeks, recording each trip’s purpose, distance, and odometer readings. You are able to use the same logbook for the next 5 years unless your circumstances change. There are plenty of logbooks available and most satisfy all requirements. Our suggestion for a logbook is to use the ATO app on your mobile phone.

 

ATO APP TO KEEP ALL YOUR RECORDS IN ONE PLACE AND UPLOAD BY TAKING A PHOTO

ATO App

We recommend the ATO app because it is free, and you can easily export the information you enter and send it to us. Simply take the picture within the app, and it automatically enters the information into the app with no further input required by you. For the younger among us, it’s just like taking a photo of your meal and sharing it on Insta. The ATO app enables you to keep all your logbook records, car related tax invoices and receipts in one place.

 

What are you able to claim?
You are able to claim as deductible work-related car expenses, fuel, oil, vehicle registration, insurance and maintenance. Most importantly, you can depreciate your vehicle as it ages and this expense is often larger than the cents per km method.

What are you not able to claim?
While customising your vehicle may be tempting, it is important to know that not all expenses qualify. Capital costs and cosmetic enhancements are not immediately tax deductible so if you were to tint your windows for summer, this would not qualify as a car-related expense.

Contact us to find out more, and to clarify how to apply any ideas to your unique situation.

By James Dolahenty and Denis Benoit from our Tax and Business Advisory teams.

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