Vehicle Related Expenses
It is that time of year again. The time of the year when you need to compile all of your receipts, invoices and statements and spend some time with your accountant and complete your tax return.
Doing your taxes does not need to be stressful or confusing. Knowing what you can and can’t claim is a big help and can reduce your stress levels by a lot.
Did you know that you can claim certain vehicle related expenses? Claiming work related travel is simple and can be tracked throughout the year. Let us explain the expenses you can claim with regards to your work-related travel.
Using your car for work
If you are using your own vehicle to complete your work-related tasks you can claim this on your tax return. Using your own car for work has the benefit of knowing the car, the comfort and the security of being in a familiar setting, however using your car also means that you are increasing your kilometres, getting closer to services and general wear and tear.
Travelling from one workplace to another
There are times when you are needed at one job site and then another throughout the day. If this happens, you are able to claim the travel between the two sites.
Travelling to an external meeting
If it is a requirement that you need to attend an external meeting or conference outside of your normal workplace you can claim the travel costs from your workplace to the meeting. If you are leaving from home to go to the different workplace and then heading to your normal place of business afterwards, this can also be claimed.
If you choose to take a detour between going from one workplace to another and it is for private reasons, this is also not tax deductible. You can only claim the direct route from one premise to the next.
So how do you keep track of when you use your vehicle for work and know what to claim?
If you use your car for less than 5,000 kilometres in a financial year you should keep a logbook noting each trip and the kilometres travelled so you can accurately justify your claim. You will receive 66c per kilometre claimed. You can also use our Vertigan Partners App to keep a record of your kilometres.
If you are using your car for more than 5,000 kilometres in a financial year you can use the logbook method. Under this method you are required to keep written evidence and a log book to determine your business use percentage.
At a minimum a logbook needs to be kept for 12 weeks to be able to calculate the percentage of work related use over a long period of time. You need to record the odometer reading at the start and end of the period you are tracking. You will also need to keep track of the odometer reading at the start and end of each business trip to ensure you calculate the business use correctly.
Under this method you can claim running expenses of the vehicle and decline in value. These are based on the percentage that is worked out as work related. Just remember to keep receipts of all expenditure, especially fuel.
If you are not already keeping a logbook, now is a good time to start. Ensure that you are keeping accurate records and all receipts. Using a online program to store receipts is also a good idea to avoid losing the information.
Knowing your deductions and what you can claim, can save you a lot of money in the long run. A little bit of extra work now will help you in the long run.
If you need assistance with your tax return or understanding your deductions – we are here to help.