ATO Car Logbook Update: Is Your Logbook Still Valid?

Here’s a common mistake we see often at tax time: claiming car expenses based on a car logbook that no longer reflects how you actually use your vehicle.

The Australian Taxation Office has reminded taxpayers that now is a good time to check whether your car logbook is still doing its job. Many people assume a logbook automatically lasts five years. It doesn’t – not if your circumstances have changed.

And most business owners have.

The Five-Year Rule (And the Catch)

Under the ATO logbook method, you record all vehicle trips for a continuous 12-week period. That logbook determines the work-related percentage of your vehicle use, which you can apply to your car expense claims for up to five years.

But there’s a condition: your logbook must still accurately represent how you use the vehicle.

If your driving patterns have changed, the ATO expects a new logbook. Using an outdated logbook means you’re either under-claiming legitimate expenses or over-claiming and risking an ATO adjustment.

When Your Car Logbook Becomes Outdated

For trades, health practices, and professional service businesses, work travel patterns change more often than people realise.

Common situations that require a new car logbook include:

Business growth changes your travel
You’ve hired staff and now send employees to job sites instead of going yourself. Your ute that was 80% work use three years ago might now be 40% work use.

Relocation affects your commute
You’ve moved your practice to a new location, changed office spaces, or started working from home more frequently. The distance and frequency of work trips have changed.

Your role or client base has shifted
You’re doing fewer on-site visits, more admin work, or your client base has changed from metro to regional (or vice versa). Your vehicle use percentage no longer matches the old logbook.

You’ve changed vehicles
Switching from a ute to a sedan, or upgrading your work vehicle, often signals a change in how the vehicle is used for business purposes.

Even small changes can significantly affect your work-use percentage, which directly impacts how much you can claim.

What You Can Claim Under the Logbook Method

The logbook method allows you to claim the work-related portion of actual car expenses, including:

• Fuel or electricity (for electric vehicles)
• Servicing, repairs, and maintenance
• Registration and insurance
• Tyres and replacement parts
• Lease payments or depreciation
• Interest on a car loan

Your logbook determines what percentage of these costs relate to work. Without an accurate, up-to-date logbook, that percentage becomes difficult to justify if the ATO reviews your claim.

Why This Matters for Your Tax Return

An outdated car logbook creates two problems:

Under-claiming: If your work use has increased but your logbook reflects old patterns, you’re missing out on legitimate deductions.

Over-claiming: If your work use has decreased but you’re still claiming the old percentage, you’re at risk of an ATO adjustment, penalties, and interest charges.

Both scenarios cost you money.

What the ATO Looks For

The ATO’s data matching systems track vehicle registrations, fuel card transactions, and claimed deductions. If your car expense claims don’t align with your actual usage patterns, it triggers a review.

During an audit, the ATO will ask:

• Does your logbook reflect current work travel?
• Have your circumstances changed since the logbook was completed?
• Can you demonstrate that the claimed percentage is accurate?

If the answer to any of these is uncertain, you have a problem.

How to Complete a New Car Logbook

A new car logbook requires 12 weeks of continuous records showing:

• Date of each trip
• Odometer reading at start and end
• Total kilometres travelled
• Purpose of the trip (work or private)

The logbook must cover a representative 12-week period. Choosing a period that doesn’t reflect typical usage (such as only recording trips during your busiest season) won’t meet ATO requirements.

Once completed, the new logbook can be used for up to five years, provided your circumstances don’t change again.

Where Sharp Accounting Can Help

At Sharp Accounting, we work with trades, health practices, manufacturing, and professional service businesses to ensure tax deductions are claimed correctly, and records meet ATO requirements.

An outdated car logbook is one of the most common issues we see during tax planning reviews. It’s also one of the easiest to fix – but only if addressed before the ATO raises questions.

If you’re unsure whether your current car logbook still reflects how you use your vehicle, or if you’d like help setting up a new logbook that meets ATO standards, contact us.

A quick review now can prevent problems later.