The are four methods that you can use to claim motor vehicle expenses.
Cents per kilometre method
This claim is based upon a reasonable estimate and limited to 5,000 kilometres. The business kilometres are then multiplied by the rate determined by the engine capacity.
12% of Original Cost
Business and employment usage must exceed 5,000 kilometres. You need to be able to reasonable basis to demonstrate the business kilometres exceeded 5,000 kilometres. You claim 12% of the original cost of the car.
1/3rd of actual expenses
Business and employment must exceed 5,000 kilometres. You need to have formed a reasonable basis to demonstrate the business kilometres exceeded 5,000 kilometres. You then claim 1/3 of all the motor vehicle expenses you can substantiate.
To claim this method you must have a valid logbook that is less than 5 years old and covers a 12 week period. You need to substantiate all expenses. Using the method your claim is the business percentage as per your log book of motor vehicle expenses that you can substantiate.
Please call our Melbourne office to find out which of the above methods is right for you.
Chris Guardiani CPA