You need to keep a record and claim for actual work related travel expenses, such as petrol or diesel costs. Rather than claiming these expenses as car expenses, include them in the travel expenses section of your tax return.
You can claim fuel and oil costs based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year.
If you use the cents per km rate set by the ATO, you can claim 72 cents per kilometre for the 2021/2022 tax year - keep in mind you can claim up to 5000km. If you use the logbook or actual expenses method, you can claim all your business-related car expenses.
You can claim running costs and decline in value of your car. You must keep: receipts for your fuel and oil expenses, or a record of your reasonable estimate of these expenses based on the odometer readings for the start and end of the period for which you are claiming.
Your tax agent can help work this out for you. Fuel/Petrol without a logbook: Even if you haven't kept a car logbook, as long as you can demonstrate how you calculate the number of kilometres you're claiming, the ATO will allow a claim up to a maximum of 5,000km, using the cents per km method.
If you travel a lot you may want to know how many kilometers or how much fuel you can claim without receipts. You can claim up to a maximum of 5,000 business kilometers without written evidence, such as receipts or logbooks, for the financial year.
Without receipts, you can claim up to 5000 kilometres in a year with the cents per kilometre method. You can claim 72 cents per kilometre for the 2021/2022 tax year. How to calculate cents per km?
Claiming actual expenses
In these circumstances, you can claim the actual expenses that relate to your work travel, for example if you use a ute. Examples of actual expenses include: fuel.
Employees who agree with their employer to use their own vehicle are paid a motor vehicle allowance of $0.91 per kilometre for the distance they travel: between their employer's depot and job sites.
You can claim the cost of travelling: directly between two separate workplaces – for example, when you have a second job. from your normal workplace to an alternative workplace (for example, a client's premises) while still on duty, and back to your normal workplace or directly home.
You can claim a deduction for parking fees and tolls you incur when you use your car or other vehicle for work-related purposes. You can't claim a deduction for parking at or near a regular place of work. You also can't claim a deduction for tolls you incur for trips between your home and work.
The car cost limit for the 2021/22 financial year is $60,733, which means that no matter what you paid for your car, you can only claim the business-use percentage of your car up to that $60,733 limit.
You can claim a deduction for clothing and footwear you wear to protect you from the real and likely risk of illness or injury from your work activities or your work environment.
72 cents per kilometre for 2020–21 and 2021–22. 68 cents per kilometre for 2018–19 and 2019–20.
What if I receive a travel allowance? If you receive a travel allowance from your employer it is usually considered taxable income and is listed on your income statement. As long as you spent the money you were paid as an allowance, you can claim a tax deduction against it at tax time.
How much is a typical car allowance? According to various sources, a typical car allowance in a salary package in Australia is in the range of $18,000 - $20,000. Of course, the amount of your car allowance from your employer is dependent on your overall salary and may vary significantly.
Can you require employees to use their own vehicles for work? Yes, you can require employees to use a personal vehicle for work, and for many employers, this may seem safer than providing company cars. But you may be surprised to learn that it does put you at risk of vicarious liability.
A car allowance is provided by your employer and is meant to cover the purchase or lease of a vehicle you can use for business and personal purposes or cover the maintenance of your current vehicle that you will be using for business-related driving.
Motor vehicle and travel
The most common tax deductions as a sole trader are for business kilometres and travel deductions. Expenses such as fuel, maintenance, and general wear and tear on your vehicle when used for business purposes are claimable tax deductions.
Common types of motor vehicle expenses you can claim include: fuel and oil, repairs and servicing, interest on a motor vehicle loan, lease payments, insurance, registration, depreciation (decline in value) of the vehicle.
Common tradie tax deductions include:
Protective items (hard hats, steel cap boots, safety glasses etc.) Laundry/cleaning of work clothes. Sunscreen and sunglasses (if you work outside) Tablet, computer and mobile phone expenses (work related portion only)
In some circumstances you may not need receipts, but you still need to show you spent the money and how you calculate your claim. Specific exceptions are: Total work expenses $300 or less. Total laundry expenses $150 or less.
The ATO assesses individual tax returns using high-tech cross-checking systems that detect inaccurate and fraudulent deductions.
Logbook method
If you are travelling more than 5,000 kms for business during one financial year and planning on claiming car expenses, the ATO requires that you keep a logbook of distance traveled and the purpose for your travel.
an income tax return is generally two years for individuals and small businesses and four years for other taxpayers, from the day after we give you the notice of assessment. a business activity statement (BAS) is generally four years from the day after the notice of assessment is given.