Claiming your work related car travel expenses

From 1 July 2015 the government has made changes to the way you can claim your work related car travel expenses.

Prior to 1 July 2015 taxpayers could use four different methods to calculate their claims.

Read on to see what changes were put in place.

•  Cents per kilometre method (otherwise known as the 5,000km’s method), 
• 12% of the Actual expenses method, 
• Logbook method, 
• One third of actual expenses method.

But as of 1st July 2015 the government has reduced this choice down to only two methods being:

• Cents per kilometre method (5,000km’s method)
• Logbook method. 

As there are now only 2 methods, it is imperative that those wanting to claim in excess of the cents per kilometre method ($3,300 per annum) utilise the log book method and prepare a log book to support this. 

As we are in the final 12 weeks of the 2016 financial year, we recommend that you start using a logbook immediately to calculate your work related use.

Another change which taxpayers should be mindful of is that the ATO has eliminated the choice used for the rates available according to the engine capacity & now there is only one rate of 66 cents per kilometre travelled, irrespective of the engine capacity which can be used when applying cents per kilometre method.

Logbook Method – Things to remember

Tax payers usually with high percentage of work related travel or a higher vehicle value may opt to choose this method. The taxpayers need to complete a 12 week car logbook of the odometer reading which would give them the business use percentage when claiming their car expenses. You can claim costs like fuel, registration, insurance, repairs and maintenance and depreciation of the vehicle used.

If your work related use and the nature of your job has not changed a great deal the ATO accepts a log book every 5 years, however if your work related percentage is likely to change due to change in the nature of your position, we recommend that you do a new logbook immediately to calculate the new business use percentage.

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