Attn: Small business owners re vehicle expenses?

[Jaybe]

I run a small accounting business from home, and currently travel quite a distance to my clients. DH and I have decided to up size my car, and we're planning to change from a small hatchback to a station wagon type size. To do this we're probably looking at about a $20k loan, and a slight increase on our rego, CTP and comprehensive insurance.

For those who claim vehicle expenses as tax deductions, do you keep a log book to justify your expenses? Or how did you work out your % to decide how much to claim? And does it make much of a difference to do it this way? I am trying to work out if we can actually afford it by getting the tax benefit for it.

Would love any feedback, thanks

[Mirandac80]

Hi Jay, are you a sole trader or a company? We have a small excavation business but we are sole trader. My car can be 100% claimed under the business including cost of the car,rego, insurance, and diesel as it is a dual cab ute, any other car can be claimed 80%. To be honest i don't keep a log as our accountant works it all out for us at the end of the financial year! But you can buy little vehicle logs from newsagents, it wouldn't hurt to jot down your travels.
Do you have an accountant?

So to answer your question, you should be able to claim 80% on all your car expenses for a small business (sole trader, not sure about company)
HTH

[Jaybe]

Yep Miranda im a sole trader, and it isnt a utility vehicle so then in theory it should be 80% to claim? So you dont need to account for barely any personal portion like with other things (phone, internet etc).

Oh and DH is my accountant hes just been really busy at work and I havent wanted to hassle him about it, so I thought I would try here first.

[PJW]

Hi Jaybe,

We have a Company so this may not be the same as a Sole Trader but we were advised by our Accountant to keep a log book for 3 months. The percentage we claim for vehicle expenses is based on how much we used the car for business purposes during this three months.

HTH

PJ

[Effie]

I didnt have a company but did use a vehicle for business when I was temping...

There are a couple of options... if the business usage is under 5000km there is no log book requirement and you use the c's per km deduction (which includes fuel and all other expenses).

If its more than 5000km in the year, then its best to work out the business % by doing a log book for 3 months and applying it to the full year... the business % can then be applied to all vehicle expenses (including interest on the car loan, servicing, fuel, parts/tyres etc). I think over 80% business use needs more verification but I cant remember for sure. I think this is how it works for a sole trader as well, even though I wasnt using my ABN for the vehicle use at the time.

Etax is pretty helpful on the vehicle expenses if you have a look at it there?

[emkate]

Hi Jay,

We have a small business and all we had to do was have a log book for 3 months, add up the percentage of time it was used for work and claim that back on all vehicle expenses (including petrol). As long as you keep the log book for proof of how you worked it out you'll be fine.