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MOTOR VEHICLE EXPENSES

Paul Money Partners > Blog > MOTOR VEHICLE EXPENSES

Clients are missing out on claiming a greater deduction for their motor vehicle expenses as they have not maintained a proper log book. This log book can be in the form of a pre-printed book or you can maintain your own records as long as it contains the correct details. The idea of a log book is to determine the percentage of business use. The percentage is then used to claim a portion of your fuel and running costs against your assessable income.

Clients are missing out on claiming a greater deduction for their motor vehicle expenses as they have not maintained a proper log book. This log book can be in the form of a pre-printed book or you can maintain your own records as long as it contains the correct details. The idea of a log book is to determine the percentage of business use. The percentage is then used to claim a portion of your fuel and running costs against your assessable income. Current ATO guidelines prescribe that a valid logbook must contain the following details:

  • when the logbook period begins and ends
  • the car’s odometer readings at the start and end of the logbook period
  • the total number of kilometres the car travelled during the logbook period
  • the number of kilometres travelled for each journey recorded in the logbook (if you made two or more journeys in a row on the same day, you can record them as a single journey). You will need to record the
    • start and finishing times of the journey
    • odometer readings at the start and end of the journey
    • kilometres travelled
    • reason for the journey
  • the business-use percentage for the logbook period
  • the odometer readings at the start and end of each income year you use the logbook method

Remember that this logbook must be kept for a minimum of 12 continuous weeks and should reflect the normal usage of for the year. While this sounds like an arduous task, the log book will be valid for 5 years as long as your travel patterns do not alter greatly. If your travel changes, you can always start a new log book at any time and don’t forget to hold onto your receipts for substantiation.