Choosing the Right Method to Claim Motor Vehicle Expenses for Your Business (August 2024 Tax Update)

Relevant For:

Business owners, sole traders and bookkeepers managing vehicle expenses for business purposes.

Key Points:

• Accurate records of vehicle expenses are essential for maximum deductions.
• Regardless of entity structure, ‘non-cars’ require the “actual costs” method.
• Trusts and corporate structures must use the “actual costs” method, with receipts for substantiation.
• Sole traders and partnerships may be eligible to use the “cents-per-kilometre” and “logbook” methods.
• Cents-per-kilometre allows 88 cents/km, up to 5,000 km/year.
• Logbook method requires detailed odometer readings for a 12-week period.

Full Article:

When your business owns or leases a vehicle used for business purposes, it’s crucial to keep accurate records to maximise your vehicle expense deductions.

Claimable running costs include:

• Fuel;
• Oil;
• Repairs;
• Servicing
• Insurance premiums;
• Registration;
• Interest payments;
• Lease payments; and
• Depreciation

The method you use to calculate your claim depends on your business structure and the vehicle type.

For Trusts and Corporate Structures: