Car claims for work use

Claims for private car use for work purposes have changed!  These days there are only two methods available to employees, sole traders, contractors and partners to make a claim.  They are the log book method and the cents/kilometre method.  Each one has its advantages and disadvantages but where there is significant employment and/or business use, the log book method will maximise your claim!

Most of us don’t like maintaining log books, but recording employment/business trips (other than home to work, work to home) for just a twelve week period gives you a log book that is valid for five years!  Your log book will establish an employment/business use percentage.  This percentage may then be applied to all car expenses such as depreciation, fuel, repairs and maintenance, loan interest, registration and insurance.

The cents/kilometre claim method is limited to a maximum of 5,000 kilometres per year even though more kilometres  may have been travelled for work.  This is known as the “reasonable estimate” method because that’s all you’ll need to substantiate the claim – a reasonable estimate!  No substantiation or receipts are required to support of the claim, however you do need to be able to demonstrate how the number of kilometres was worked out.  This will be multiplied by the ATO set rate which is 72c/kilometre for 2021/2022.

Travel between home and your workplace is generally a non-deductible expense, however you may be able to claim a deduction when you carry bulky tools and/or equipment to and from work.

Still unsure about private car use for employment/business?

CONTACT US TODAY at BSN & Co so we can help you with your car claim for work use.

Credit: Image by PIRO4D from Pixabay