This information will help you when claiming a deduction for motor vehicle expenses for
your business – whether you use a registered tax agent or lodge your own return.
As a business owner, you can claim a tax deduction for expenses for motor vehicles – cars and certain other vehicles – used in running your business.
For a summary of this content in poster format, see Motor vehicle expenses (PDF)
Types of vehicles
Cars (for income tax purposes) are defined as motor vehicles (including four-wheel drives) designed to carry both:
a load less than one tonne
fewer than nine passengers.
Other vehicles include:
motorcycles
vehicles designed to carry either
one tonne or more (such as a utility truck or panel van)
nine passengers or more (such as a minivan).
The motor vehicle must be owned, leased or under a hire-purchase agreement. If you operate your business as a company or trust, you can also claim for motor vehicles provided to an employee or their associate as part of their employment.
Expenses you can claim
You can claim:
fuel and oil
repairs and servicing
lease payments
insurance cover premiums
registration
depreciation (decline in value).
Separate private from business use
If a motor vehicle is used for both business and private use, you must be able to correctly identify and justify the percentage that you are claiming as business use. The percentage that is for private use isn't claimable. This is an area where we often see errors made. You can use a logbook or diary to record private versus business travel. Travelling between your home and your place of business is considered private use, unless you are a home-based business and your trip was for business purposes.
Next step:
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If you'd like further assistance on how to claim a tax deduction for your business' motor vehicle expenses, book a free consultation with us or give us a call today on 0429 022 474.
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