Claiming Motor Vehicle Expenses?
You can claim a deduction for motor vehicles expenses that are part of the everyday running of your business – but you can only claim the business portion if your vehicle is for both business and private use.
Depending on whether you’re a sole trader, partnership, company or trust and the type of motor vehicle you drive (for example, a car, ute or motorcycle), you may be able to use the:
- cents per kilometre method – for claims up to 5,000 business kilometres per car, at a rate of 72 cents
- logbook method – where you need to keep a logbook for at least 12 continuous weeks and work out the percentage of business use for each expense
- actual costs method – where you can only claim the actual costs of expenses incurred based on receipts.
If you use the logbook or actual costs methods, you can generally claim a deduction for depreciation. For the 2020–21 income year, the limit you can use to work out your claim is $59,136, or the cost of the vehicle if it’s under this amount.
You need to keep records showing how you calculated your claim for five years.
Click here to download a handy 2 page PDF factsheet from the ATO.