How Can I Claim my Motor Vehicle Expenses in My Tax Return?

Vehicle and travel expenses – including travel between work and home

You can claim vehicle and other travel expenses directly connected with your work, but generally you can’t claim for normal trips between home and work – this is considered private travel.

 

You can claim the cost of travelling:

>directly between two separate workplaces – for example, when you have a second job (providing one of the places isn’t your home)

>from your normal workplace to an alternative workplace (for example, a client’s premises) while still on duty, and back to your normal workplace or directly home

>if your home was a base of employment – you were required to start your work at home and travelled to a workplace to continue your work for the same employer

>if you had shifting places of employment – you regularly work at more than one site each day before returning home

>from your home to an alternative workplace for work purposes, and then to your normal workplace or directly home. This does not apply where the alternative workplace has become a regular workplace

>if you needed to carry bulky tools or equipment your employer requires you use for work and couldn’t leave them at your workplace – for example, an extension ladder or a cello.

 

You can’t claim the cost of driving your car between work and home just because:

>you do minor work-related tasks – for example, picking up the mail on the way to work or home

>you have to drive between your home and your workplace more than once a day

>you are on call – for example, you are on stand-by duty and your employer contacts you at home to come into work

>there is no public transport near where you work

>you work outside normal business hours – for example, shift work or overtime

>your home was a place where you ran your own business and you travelled directly to a place of work where you worked for somebody else

>you do some work at home.

 

Itinerant work

You cannot count your home as a workplace unless you carry out itinerant work.

If you do itinerant work (or have shifting places of work) you can claim the cost for driving between workplaces and your home. The following factors may indicate you do itinerant work:

>Travel is a fundamental part of your work, as the very nature of your work, not just because it is convenient to you or your employer.

>You have a ‘web’ of work places you travel to, throughout the day.

>You continually travel from one work site to another.

>Your home is a base of operations – if you start work at home and cannot complete it until you attend at your work site.

>You are often uncertain of the location of your work site.

>Your employer provides an allowance in recognition of your need to travel continually between different work sites and you use this allowance to pay for your travel.

Car expenses

If you are claiming a deduction for using your own car in performing your employment duties (including a car you lease or hire), it is treated as a car expense.

If you use someone else’s car for work purposes, you may be able to claim the direct costs (such as fuel) as a travel expense.

>If the travel was partly private, you can claim only the work-related portion.

When you can claim

You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee, for example, to:

>carry bulky tools or equipment (such as an extension ladder or cello) which your employer requires you to use for work and cannot leave at work

>attend conferences or meetings

>deliver items or collect supplies

>travel between two separate places of employment, provided one of the places is not your home (for example, when you have a second job)

>travel from your normal workplace to an alternative workplace and back to your normal workplace or directly home

>travel from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client’s premises)

>perform itinerant work.

>If you receive an allowance from your employer for car expenses, it is assessable income and the allowance must be included on your tax return. The amount of the allowance will usually be shown on your payment summary.

When you can’t claim

Most people can’t claim the cost of travel between home and work because this travel is private.

Calculating your deductions in relation to car trips

There are some changes to work-related car expense deductions from 1 July 2015. Below is a breakdown of the methods and calculations which applied from and before 1 July 2015.

 

From 1 July 2015 – two methods:

 

The government has simplified the car expense deductions for 2015–16 and future income years. From 1 July 2015, the one-third of actual expenses method and 12% of original value method have been abolished.

 

Cents per kilometre method (with some changes)

The cents per kilometre method is available for use with some changes. Separate rates based on the size of the engine are no longer available from 1 July 2015. Under the revised method, individuals use 66 cents per kilometre for all motor vehicles for the 2016–17 income year. The Commissioner of Taxation will determine the rate for future income years.

 

Your claim is based on 66 cents per kilometre for 2016–17 income year

You can claim a maximum of 5,000 business kilometres per car

 

 

You don’t need written evidence but you need to be able to show how you worked out your business kilometres (for example, by producing diary records of work-related trips).

Where you and another joint owner use the car for separate income-producing purposes, you can each claim up to a maximum of 5,000 kilometres.

 

Logbook method (with no change to its rules)

Your claim is based on the business-use percentage of the expenses for the car.

Expenses include running costs and decline in value but not capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs.

To work out your business-use percentage, you need a logbook and the odometer readings for the logbook period. The logbook period is a minimum continuous period of 12 weeks.

You can claim fuel and oil costs based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year.

You need written evidence for all other expenses for the car.

*The information here is taken directly from the ATO website with the intention of being a quick and easy reference for our clients and friends.

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