Maximizing Deductions for Business-Related Motor Vehicle Expenses

As a business owner, you are entitled to claim tax deductions for various motor vehicle expenses related to your business activities, including:

• Fuel and oil

• Repairs and servicing

• Interest on motor vehicle loans

• Lease payments

• Insurance premiums

• Registration fees

• Depreciation of the vehicle

  
  

Choosing the Right Claim Method

The method you use to claim these expenses will depend on the type of vehicle you have and your business structure. If you are operating as a sole trader or in a partnership, consider which of the following methods suits your situation best:

1. Cents per Kilometre Method

   • This method allows you to claim a set rate for each kilometre driven for business purposes, up to 5,000 kilometres per year.

     
     

2. Logbook Method

   • This method requires you to keep a detailed logbook or diary to record your motor vehicle usage. You can then calculate the deductible expenses based on the percentage of business use.

     
     

Important Considerations

• No Private Use Deductions: Remember, you cannot claim expenses for any private use of your motor vehicle.

  
  

• Record Keeping: It is crucial to maintain accurate records for at least five years. Ensure all records are stored safely and are either in English or easily translated into English. Proper record-keeping will facilitate timely and accurate lodgment of your claims.

  
  

Need More Help?

If you have further questions or need personalized advice on claiming motor vehicle expenses, do not hesitate to come to us for professional advice.